As a Result of Bringing Back the Human Connection Starbucks Closing 90 Mobile-Only Stores
A central part of Starbucks’ turnaround strategy—led by CEO Brian Niccol—is a renewed emphasis on human connection between employees and customers, shifting away from a tech-heavy approach. More than five years after introducing mobile-order-only pickup stores, the company is phasing out the concept, citing a lack of the inviting atmosphere it aims to cultivate. Starbucks currently runs nearly 90 of these no-seating, quick-exit locations.
“We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,” Chief Executive Brian Niccol told investors on a Tuesday earnings call.
The mobile-only concept foreshadowed an era of mobile-first, quick-service restaurant designs in response to changing consumer habits due to the pandemic and the following economic inflation, and that’s often meant a de-emphasis on dining rooms. Chipotle’s digital-only restaurant and Chick-fil-A’s all-mobile pickup restaurant are two such examples.
Starbucks may have leaned too heavily into its mobile success, losing sight of how its physical stores were being managed. Once celebrated as the ideal “third place” — a welcoming space between work and home — some critics argued that stores had become too impersonal. The company prioritized investments in the mobile experience, even launching streamlined, pickup-only locations focused solely on takeout. As a result, the guest experience suffered. Mobile orders surged to the point where they overwhelmed operations, leading to long wait times that frustrated both in-store customers and app users alike.
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Starbucks Turnaround Strategy Emphasizes the Human Connection Over Technology
“The technology story here at Starbucks—guess what?—the star of the story is not technology,” says Chief Technology Officer Deb Hall Lefevre in a Fortune interview. “It’s human connection in our coffee houses.”
Starbucks is intentionally stepping back from some of its tech-driven efficiencies to prioritize a more personal, hospitable experience. According to Lefevre, these changes aim to give baristas more time to create meaningful “moments of connection” with customers.
Coffeehouse of the Future
As part of this shift, the company is developing a new “coffeehouse of the future” prototype featuring 32 seats and a drive-through, expected to launch in the next fiscal year. Since Brian Niccol took over as CEO last year, he has emphasized creating more inviting store environments and enhancing employee training to elevate the customer experience.
Chief Financial Officer Cathy Smith shared that Starbucks plans to invest over $500 million in staffing at U.S. company-operated stores over the next year. These efforts come as the company works to rebound from a prolonged sales slump. Starbucks reported its sixth straight quarter of declining same-store sales, with fewer transactions outweighing increases in average spend per order.
According to Niccol, stores participating in a pilot program designed to improve service have already seen faster service times and stronger sales. The company is also testing new technologies to better schedule and speed up order fulfillment, along with rolling out trendy menu innovations such as protein-infused cold foam drinks.
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