Starbucks Stores in US and Canada coronavirus plan

Starbucks (SBUX) said on Sunday it would halt in-store customer seating in North America for at least two weeks, while limiting hours and shuttering a few shops in high traffic areas, in a bid to help reduce spreading of the coronavirus.

In a memo sent to more than 220,000 partners across the U.S. and Canada, Starbucks plans to limit customers to carry out orders only, and will temporarily close its company-operated stores in “high-social gathering locations” like shopping malls and university campuses.

The coffee giant’s action dovetailed with other major brands engaged in the worldwide battle to encourage social distancing, as COVID-19 engulfs countries and hammers the world economy.

“Over the last 24 hours, as more communities, including the federal government, have called for increased social distancing to help contain the virus, we have made the decision to move to our next level of protocols,” Rossann Williams, president of U.S. company-operated business and Canada, wrote in a memo to Starbucks partners.

“Starting today, we will move to a ‘to go’ model across the U.S. and Canada for at least two weeks to help prevent prolonged social gathering in our cafés,” Williams added.

In Seattle and New York — two states particularly hard hit by the virus — Starbucks will reduce operating hours or temporarily close select stores, the memo said.

No more ‘third place’ — for now

Starbucks, which has established itself as a “third place” between home and work, is temporarily curtailing the use of the lounge-like common areas — both inside and outdoors — where customers frequently linger to talk, surf the Internet or work on laptops.

Meanwhile, stores will also have a modified condiment bar where items are available upon request. Customers can still order in-person inside cafés or use the Mobile Order & Pay offering, and drive-thrus and delivery will remain open as well.

As for exchanging cash, a designated partner handle those transactions and be allowed to wear gloves.

“These are the actions we know are effective based on our experience in China” — where Starbucks was forced to shutter locations when the coronavirus first surfaced there, according to Williams.

“Working together, I am confident we can modify operations in all stores quickly and seamlessly, as we know the majority of our customers already get their order ‘to go’ and most of our customers who typically use our café seating are also used to visiting us at [Mobile Order & Pay] and Drive Thru,” she wrote.

In late January, Starbucks said it closed more than half of its 4,000 China-based stores, its second-largest and fastest-growing market, amid the coronavirus outbreak. A month later, Starbucks said it had reopened most of the stores. At the moment, 90% of the China locations are now open.

In a regulatory filing posted this month, the company said it expects comparable-store sales in China for the fiscal second quarter to fall by about 50% versus a year ago because of the closures. Starbucks also expects quarterly revenue in China to stake a hit of approximately $400 to $430 million in the quarter.

At the time of this writing, the number of confirmed COVID-19 cases in the U.S. hit 3,244, with the death toll rising to 62. Most of the deaths in the U.S. are in Washington, the home state for the Seattle-based coffee giant.

Earlier this month, Starbucks placed a temporary ban on personal cups and increased cleaning and sanitizing in its stores. Last week, Starbucks expanded its existing sick pay and personal time-off benefits to offer catastrophe pay for 14 days to any employee diagnosed or exposed to COVID-19.

Starbucks also changed the format of its annual meeting of shareholders scheduled this week to a virtual-only event.

Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter.

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