Starbucks is trying to get back to its roots as a local coffee shop as part of its turnaround plan. The company is redesigning stores with comfortable seats and tables, new espresso bars and other elements to try to draw customers back.

Bridgehampton

Starbucks is implementing a turnaround strategy focused on bringing customers back into its cafes by redesigning stores with more comfortable seating, improved lighting, and enhanced amenities. After experiencing five consecutive quarters of declining sales, the company is shifting away from its recent emphasis on digital orders and drive-thrus, aiming to recreate the community-focused atmosphere that originally defined the brand.

The initiative includes upgrading 1,000 stores in the coming year, representing 10% of its U.S. locations, with plans for further renovations. Starbucks has not disclosed the financial investment behind this effort, but the move has been met with positive investor response, as reflected in the recovery of its share price. The company hopes that by restoring the 'third place' experience, it can differentiate itself in a competitive coffee market.

Starbucks wants you to sit down again. Will it work?

It's creating comfortable seating where people want to come in. It's not just the quick grab and go concept. That's not the idea of it. And maybe over past years we lost our way a little bit on that. After five straight quarters of falling sales, Starbucks is betting its future on what worked in the past. It's the basic fundamentals of creating a coffeehouse community. Starbucks was the creator of the third place, a place where you can come and relax, be yourself and let life play out. I think we're hearing from customers that they want us to go back to playing that role in their lives. After prioritizing digital orders and drive-thrus, Starbucks is returning to its roots. This one in Bridghampton, New York, is one of four newly redesigned stores with a lot more seating. We think about 30,000 seats have come out of the system in the past several years, so across 10,000 U.S. stores. I think in the last few years, as the rise of digital orders has occurred, the impact of COVID, things like that happened, maybe customers weren't going out quite as much, but they long for it. We are thinking about comfortable places to sit and to be able to use them in a variety of ways. The lighting is good, the sounds feel nice, the aromas are wonderful. You'll see outlets returning. The company plans to upgrade 1,000 stores next year, 10% of its U.S. footprint, with even more after that. Starbucks won't say how much money it's putting into the effort, but investors are betting on the turnaround plan. Shares have recovered from an earlier sell-off in April. Look, America loves coffee, so I think there's a lot of competition out there, but Starbucks has been a true differentiator with that experience. I think customers want to sit and stay. They need a third place. They want to be together with each other.

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Breakdown