Overview: Why Starbucks Sunsets Is Phasing Out an Entire Store Format
Starbucks CEO Brian Niccol announced that the company will “sunset” its mobile-order-only “Pick Up” store format by fiscal year 2026. As part of the “Back to Starbucks” initiative, around 80–90 pick-up-only locations, including three in Tennessee, will be closed or converted into traditional, seating-equipped cafes. Niccol explained that this format had become “overly transactional and lacking the warmth and human connection that defines our brand.”
Tennessee Focus: Stores Being Closed
Among states affected, at least three pick-up-only Starbucks sunsets in Tennessee are set for closure. Locations include urban and commuter-heavy areas such as downtown Nashville and office towers in Memphis. While exact addresses were not provided publicly, local reports confirm this aligns with targeting high-traffic mobile-order-only stores.
The Why & How Behind the Decision
A Transactional Format Fails Starbucks’ Brand Test
Launched in 2019, mobile-order-only stores targeted app-first customers. However, Niccol and his team found them incompatible with Starbucks’ core ethos, prompting a strategic U-turn.
Strategic Reset Aligned With “Back to Starbucks”
The broader turnaround emphasizes:
- Renovating over 1,000 coffeehouses ($150,000 investment per store).
- Restoring community-focused experiences such as condiment bars, handwritten cup notes, and free in-house refills.
New Prototypes: The Coffeehouse of the Future
Starbucks is piloting smaller cafés:
- A 32-seat drive-thru model, expected in 2026.
- A 10-seat micro café, currently under construction in New York.
Strategic Impacts & Customer Experience
| Theme | Details |
|---|---|
| Customer Experience | Focus shifts to welcoming in-store ambiance rather than pickup speed |
| Store Closures | 80–90 pickup-only cafes closed nationwide, with conversion options |
| Renovations | Major overhauls in major markets like NYC & Southern California |
| Competitor Response | Starbucks responds to Luckin Coffee’s U.S. expansion with branding push |
Timeline of Key Events
| Period | Development |
|---|---|
| 2019 | Introduction of mobile-order-only “Pick Up” store format |
| Sept 2024 | Brian Niccol becomes CEO; accelerates turnaround planning |
| July 29, 2025 | Earnings call confirms sunset of pick-up stores by 2026 |
| Next 18 months | Phasing out stores, renovations, pilot small-format “Coffeehouse of the Future” |
Industry & Consumer Reactions
- Starbucks Executives: COO Mike Grams stated the pick-up model lacked engagement and betrayed the “third-place” brand identity.
- Employee Benefit Reform: The changes accompany new employee policies like enforced office return, streamlined staffing, and renewed managerial promotions, intending to boost partner morale.
- Industry Analysts: Retail watchdogs described the closures as part of broader retrenchment trends after multiple quarters of declining same-store sales.
- Local Feedback in Tennessee: Regular commuters in Nashville reacted with surprise, noting the sudden disappearance of a convenient on-the-go pick-up point.
Why This Matters
- Brand Identity Restored: A shift from sterile mobile models back to hospitable coffeehouses.
- Market Recalibration: As Starbucks tries to reverse traffic declines, this pivot reflects changing consumer habits.
- Urban Local Impact: Tennessee’s scheduled closings illustrate the scale and regional reach of the decision.
Final Takeaway
Starbucks’ decision to sunset pick-up-only stores, including three in Tennessee, offers insight into an evolving retail strategy, one that values connection over convenience. This is more than cost cutting: it’s a deliberate attempt to reclaim Starbucks’ identity as a welcoming community space amid rising competitors and shifting consumer priorities.
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