In a major strategic shift, Starbucks has announced it will phase out all of its pickup-only store formats by the end of fiscal year 2026. This move signals a departure from a model once built to cater to mobile-first urban dwellers and Gen Z customers.
Impact on Existing Pickup-Only Locations
Approximately 80 to 90 “Starbucks Pick Up” locations across the United States will be affected by this change. Among those impacted is a downtown San Francisco location, along with two Bay Area stores in Half Moon Bay and Gilroy.
Why Starbucks Is Moving Away From Pickup-Only Stores
CEO Brian Niccol, who took the helm in September 2024, explained the rationale behind this decision during the company’s latest earnings call. He emphasized that the pickup-only format felt too transactional, lacking the warmth and personal connection that define the Starbucks brand.
“We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,” said Niccol.
Niccol aims to revive the “Starbucks experience” by emphasizing communal seating, in-store hospitality, and meaningful moments in today’s fast-paced, digital-first world.
Background: The Rise and Fall of Starbucks Pick Up
First launched in 2019, Starbucks Pick Up stores were designed for speed and digital convenience, offering limited seating, no cash handling, and streamlined mobile ordering. However, as customer preferences evolve and foot traffic at these locations has declined for six straight quarters, the company is pivoting.
A Return to Traditional Cafes
According to Niccol, Starbucks plans to convert some pickup stores into traditional cafes, while others will be permanently closed. Despite these closures, Starbucks remains confident in its digital capabilities.
“We have a strong digital offering and believe we can deliver the same level of convenience through our community coffeehouses with a superior mobile order and pay experience,” Niccol stated.
$500 Million Investment in Renovations and Training
This shift is part of a broader brand revitalization strategy, which includes a $500 million investment in store upgrades and employee training through the “Green Apron Service” program. Starbucks intends to evaluate its North American store portfolio by the end of the current fiscal year to ensure each location aligns with customer expectations.
Mobile Ordering Remains Key
Despite the rollback of the pickup-only model, digital engagement continues to thrive. Mobile orders account for 31% of all Starbucks transactions, and the company plans to enhance the experience further with a new mobile app and updated rewards program.
Starbucks is clearly repositioning itself to focus on customer connection and in-store engagement, marking a departure from its purely digital-forward strategy of recent years. While technology remains a core pillar of its operations, the brand’s essence will be rooted in human interaction, comfort, and community as it phases out pickup-only stores.
FAQs
Why is Starbucks closing its pickup-only stores?
Starbucks found that the pickup-only model lacked the human warmth and brand identity it aims to deliver, leading to the decision to phase them out by fiscal 2026.
Will mobile ordering still be available at Starbucks?
Yes, mobile orders currently account for 31% of transactions, and Starbucks is continuing to enhance this experience through digital upgrades.
What will happen to existing pickup-only locations?
Some locations will be converted into traditional cafes, while others will close permanently as part of Starbucks’ broader portfolio review.
