Starbucks May Close Stores as 'Last Resort' to Fight Coronavirus

Starbucks' first step might be to limit seating to create 'social distancing,' CEO Kevin Johnson says.
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Coffee-shop titan Starbucks  (SBUX) - Get Report said it may take additional steps to combat the coronavirus, with the most extreme possibility being store closings.

“While we are currently maintaining regular operations across the U.S. and Canada, our stores are prepared to modify operations with options that still allow us to serve you your favorite beverage and food,” the Seattle-based company’s CEO Kevin Johnson wrote in a letter to customers.

“This means … we may adapt the store experience by limiting seating to improve social distancing, enable mobile order-only scenarios for pickup via the Starbucks app or delivery via Uber Eats, or in some cases only the drive-through will be open,” he added.

As for the “last resort, we will close a store if we feel it is in the best interest of our customers and partners, or if we are directed to do so by government authorities. In any such situation, we expect store disruption to be temporary,” Johnson said.

Starbucks was one of the first companies hit by the coronavirus, temporarily closing more than 2,000 stores in China in January. Earlier this month, the company said the virus slashed its China revenue by millions of dollars, and it was suspending its effort to open new stores in the country.

The coronavirus has infected almost 128,000 people globally, killing more than 4,700 of them.

Starbucks shares were at $64.50 in premarket trading, down 5.56% from Wednesday’s close. The stock has dipped 3.4% over the last year, compared to a 12.8% drop for the S&P 500 during that period.