Starbucks Foot Traffic Jumped In August, Fueling Expansion Plans
A typical Starbucks is around 2,000 square meters, and the new smaller format will span just 400.
Foot traffic to Starbucks stores was up by 2.6% over 2019 figures, according to Placer.ai, and the chain is responding to that surge in demand by rolling out smaller format stores.
A typical Starbucks measures around 2,000 square meters, and the new smaller-format locations will span just 400. The format, dubbed Starbucks Pickup, caters to consumers who order ahead via the Starbucks app and pick up in-store. In mid-September, the coffee giant announced plans to open 2,000 stores by 2025.
Earlier this year, the company’s chief marketing officer told CNN that Starbucks was heavily emphasizing improving efficiencies across the company’s existing locations, as long wait times plague many stores.
“One of our challenges today is that we’re not able to meet the capacity of demand that is coming through our stores,” Brewer said.
A Placer.ai review of traffic to smaller-format locations over the last 12 months shows that small format stores saw around 15% more visitors per square meter than the regular locations.
“These numbers are likely driving the decision to dedicate a significant portion of its expansion plans to ramp up infrastructure for pickup and drive-thru by 2025, unveiling automatic drink machines, and enhancing its in-app ordering capacities to lower bottlenecks at the register,” writes Placer.ai’s RJ Hottovy. “By optimizing store size and focusing on automation, Starbucks should see a more efficient reach in key markets.”
Hottovy also notes significant expansion potential for the chain in Midwestern and Southeastern markets. Nationally, Starbucks represents 7.3% of the total restaurant industry. In cities like Louisville, Memphis, and Knoxville, that number is 5%, and in Cincinnati and Indianapolis, it’s just 3.2%.
“These smaller markets are often the most receptive to new retail investment,” Hottovy writes. “Choosing locations in an unsaturated market allows the chain to capitalize on reduced rent and overhead, as well as tapping into unmet consumer demand – a potential driver of sales.”