Starbucks ends stores for generation Z after six years; See reason

Starbucks CEO Brian Niccol is closing a convenience store that was explicitly focused on the taste of generation Z by “frictionless” experiences: its “withdrawal” stores only for mobile devices. The change signals a deliberate removal of the high -speed and technology model that has defined much of the network’s recent expansion. The coffee giant will convert or close approximately 80 to 90 of these stores only for mobile orders across the country by the end of 2026, Niccol said in the teleconference of results with analysts on Tuesday, marking the end of a six-year experiment that served moving customers who seemed to prefer to make orders for his cell phone taking a coffee with milk ..

By announcing the closures, Niccol went straight to the justification in the Starbucks teleconference with analysts on Tuesday. “We consider this excessively transactional and lacking format of the warmth and the connection that define our brand,” he said.

Built mainly in urban centers, airports and hospitals, these stores are designed to maximize convenience – no registrar boxes, limited or nonexistent seats and an efficient experience to pick up and take orchestrated by the Starbucks application. Starbucks wants to bring back the cozy coffee.

Change occurs amid a period of challenges and transition to Starbucks. Sales in open stores for at least a year have fallen for six consecutive quarters, with sales in North America falling 2% more recently. Analysts point to the client’s fatigue with impersonal transactions and centered on technology and atmospheres “soulless”, especially because competitors offer new forms of hospitality and engagement. It is also a complicated issue of resolving, as Starbucks has announced in its profits that 31% of all transactions are made by mobile devices, which makes them an essential part of the business.

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The company remains compromised, according to Niccol, to improve digital and furniture experiences through technical updates in the Starbucks app and its reward program, expected to release 2026 .. but other Starbucks actions suggest that these experiences should not furniture.

Niccol, who took office as CEO in September 2024, bet his recovery strategy in restoring the brand’s emotional resonance, echoing the recognition of former CEO Howard Schultz that consumers needed a “third space” other than home or work. Niccol argued in the teleconference that customer value perceptions are close to the maxims of the last two years and are driven by gains between generation Z and millennials, which represent more than half of Starbucks’s customer base. This shows that younger consumers wanted more warmth than previously thought.

Elevation through green aprons

Starbucks has an ongoing program to “raise” its coffee shops, which involves a $ 150,000 investment per store to modernize seats, lighting and atmosphere in more standard places. The new store prototypes of the chain – already in a pilot phase in New York City – reintroduce comfortable chairs, outlets and large tables, promoting a more community and conducive environment for conviviality. Niccol said some stores for mobile devices will only be converted to this new configuration when it makes sense.

“We planned to complete an assessment of our US portfolio by the end of this fiscal year to ensure that we have the right coffee shops in the right places to boost profitability and provide the Starbucks experience,” Niccol said in the results teleconference.

Starbucks is also testing smaller -shaped stores with limited seats to combine convenience with a sense of place – another sign that the brand is not abandoning fast service, but it is recalibrating its approach to the measure that the company is preparing to end its transactional removal model, Starbucks reinforces its legacy: cafes as community anchors, not just efficiency engines. The Starbucks Age “Only by application” is coming to an end, and the company bets that its future is in the connection, not just convenience.

These investments are part of Niccol’s US $ 500 million “green apron service”, which aims to return “hospitality” to the center of its business. The initiative involves a reformulated barista dress code, highlighting the green apron, but also emphasizes personalized service. Starbucks believes this is what generation Z really wants, not a frictionless mobile request that hardly involves interaction with a human. There is other evidence that generation Z yearns for more human connection, with 91% stating in the research Harris that they want a greater balance between remote and face -to -face work.

Starbucks COO, Mike Grams, talked to earlier this week and also offered his opinions on how the company sees generation Z. He defended an approach that the company describes as “hospitality” and, when asked about the evolution of “social tips”, described how Starbucks is working to lean into a more subjective experience. “Connection is different for different people,” he said, arguing that Starbucks baristas are well positioned “to understand what each individual client wants at that time.” In other words, Starbucks is in danger of colliding with the “Generation Z’s look” as it is working to ensure that the human connection is in the foreground in its business.

When contacted to comment, Starbucks referred to Niccol’s profit report and comments on the teleconference with analysts.