Starbucks Switches To 'To Go' Model As Coronavirus Spreads, Closes Some Stores

Starbucks Corporation SBUX is temporarily discontinuing all seating in its coffee outlets in the United States and Canada due to the novel coronavirus (COVID-19) outbreak, the company announced Sunday.

What Happened

All of its stores in the two countries would operate on a "to go" basis. Customers will be able to place orders at the counter, at the drive-thru, order in advance through the Starbucks app, or get a delivery.

Irrespective of the option they chose, the customers would have to take away their coffee as the company said neither in-cafe or patio seating would be available for at least the next two weeks.

Starbucks also announced that it would be closing down some of its cafes in "high-social gathering locations" like malls or university campuses. The Seattle-based company will also either shut down stores in highly-affected areas or reduce operating hours.

"As we all know, the situation with COVID-19 is extremely dynamic and we will continue to review the facts and science and make the proactive decisions necessary to protect our partners, customers and communities," Starbucks executive vice president, president U.S. company-operated business and Canada Rosanne Williams said in a statement.

Why It Matters

The coffee chain's business was severely impacted by the COVID-19 outbreak in China, as it had to shut down stores in what is one of its largest markets.

As the outbreak eases in China, Starbucks faces the impact in its other markets, including hometown Seattle. According to the Seattle Times, as many as 22 stores in the city could be closed due to the company's latest decision.

A host of other companies, including Apple Inc. AAPL, Nike Inc. NKE, Abercrombie & Fitch Co. ANF have similarly announced the closure of their stores for the coming weeks to curb the spread of the virus.

At press time, about 3,500 cases of the coronavirus have been confirmed in the U.S., including 68 deaths, according to data from Johns Hopkins University.

Price Action

Starbucks stock closed 12.59% higher at $69.92 per share on Friday.