U.S. retail and coffee sector — August 2, 2025 — Starbucks CEO Brian Niccol has unveiled a significant shift away from the company’s mobile-order and pickup-only store format. Approximately 80 to 90 of these “Pick Up” locations will be closed or transformed into traditional cafés with seating by fiscal year 2026. Niccol criticized the mobile-only format as overly transactional and lacking the warmth and human connection fundamental to Starbucks’ identity.
In its place, Starbucks is developing a new restaurant prototype, set to launch in fiscal 2026. This hybrid “coffeehouse of the future” will feature seating for around 32 customers, drive-thru access, and approximately 30% lower construction costs compared to full-scale stores. Smaller footprint prototypes—with about 10 seats—are already underway in urban centers like New York City.
Central to Niccol’s turnaround strategy is the rollout of “Green Apron Service,” Starbucks’ most substantial operational and customer service investment to date, backed by more than $500 million in U.S. staffing and training efforts. Key elements include a renewed focus on human-driven hospitality—such as handwritten names and messages on cups, reintroduction of condiment bars, and ceramic mugs—and deployment of Smart Queue technology to speed order sequencing. Early pilot results from approximately 1,500 stores showed double-digit improvements in café orders delivered in under four minutes, with 80% meeting the sub‑4‑minute target.
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These changes occur amid a prolonged decline in same-store sales—six straight quarters of negative trends—with U.S. comparable sales down about 2 percent most recently. Despite this, Starbucks leadership remains optimistic that renewed focus on hospitality and experience will reverse performance by 2026.
Niccol emphasized that Starbucks is not abandoning digital convenience. Mobile Order & Pay still represents approximately 30–31% of all orders, and the company plans to continue investing in the digital platform. Instead, mobile ordering will be integrated within full-service cafés that prioritize ambiance and human interaction, which Niccol calls “the Starbucks experience.”
Taken together, these moves reflect a strategic pivot: Starbucks is repositioning itself from a transactional, automation-driven model toward a hospitality-first approach. This includes phasing out the pickup-only stores, implementing a new café prototype, investing heavily in staffing and customer service standards, and leveraging technology like Smart Queue to support speed and consistency. It is a bold attempt to restore the brand’s identity as a welcoming community space—even in an era of rapid digital disruption and pressure on margins.
