In China, the company says it is on track to add at least 500 net new stores this fiscal year, despite the virus impact.
Starbucks is also examining its Canada operations and plans to restructure its business there over the next two years. The company said it will potentially close 200 additional stores there, with some of these changing locations.
Breakfast Sales
Chains dependent on breakfast sales, like Starbucks, have gotten hit disproportionately hard because there are so many fewer commuters on the road these days. Starbucks’ price point is also higher than rivals like Dunkin’, Bloomberg Intelligence’s Halen said, making it less well positioned heading into a pandemic-related recession.
On top of that, a smaller share of its stores have drive-thrus than rivals. Lingering in the café enjoying a coffee was a key part of the “third place” experience, but that concept is “toast right now,” Halen said.
“They’re really behind here. I don’t blame the management team, the management team is excellent -- it’s just the impact of coronavirus is going to hurt them that much more because it’s a café,” he said.
This article was provided by Bloomberg News.