How Starbucks handled coronavirus in China: temperature checks and gloved drink drop-off
Imagine getting your temperature checked at the door before picking up your latte. That was just part of the system implemented at thousands of Starbucks locations across China earlier this year when coronavirus concerns led the world’s largest coffee chain to temporarily shut down more than half of its 4,300 shops there, leading to a steep decline in sales.
Now Starbucks has reopened the vast majority of its shops in China, as new cases of COVID-19 are on the decline there. And it’s sharing some of the details behind the processes it put in place, some of which are crossing over to the United States.
Starbucks also said that to date, “there are no perceptible signs of COVID-19 impact on our U.S. business.” The U.S. is its biggest market, accounting for about 65 percent of revenue in the recent fiscal first quarter.
In China, Starbucks came up with a “contactless experience” that worked like this: When customers order via the app, they get a special code to present when picking up. "During the COVID-19 crisis," a company post reported, the code was "changed to inspiring messages, such as 'Hang in there' and 'Tomorrow will be spring.'” When the customer arrived at the store, an employee waiting at the entrance would take their temperature and check them in. Then, another employee wearing gloves would put their purchase on the mobile order and pay station near the front of the store, and move away. Then, the customer would go to the station, pick up the drink, and depart.
Starbucks also says it paid its employees—in Starbucks-speak, they’re all called partners—while the stores were closed. And it says it expanded insurance benefits for its workers and their families.
Now, as COVID-19 cases have risen in the U.S., the company is taking extra precautions in its home market. Employees are being told to sanitize heavily touched areas regularly, “ideally every eight minutes, but no more than 30,” the company wrote in an online post.
Starbucks has stopped filling customers’ own cups or the mugs it has for in-store use. (But patrons are being told that if they still bring in their own cups, they’ll continue to get that 10-cent discount.)
Employees have been told to wash their hands every 30 minutes. They are reminded not to touch their faces and that if they do, to immediately wash their hands, Starbucks says. More cleaning staff has been brought in.
And Starbucks has changed its annual meeting, which was set to be held in Seattle on March 18, to an online-only event. The number of coronavirus cases in Washington state rose to 70 on Thursday, with a death toll of 11.
On Thursday, Starbucks gave an updated look at the financial impact of coronavirus.
“Although there are near-term financial implications, our long-term, optimistic outlook for the growth potential of Starbucks is undiminished,” CEO Kevin Johnson and Chief Financial Officer Pat Grismer said in a statement.
Starbucks is seeing “encouraging signs of recovery in China,” they said, a critical market now and for the future, as the coffee giant expands. But COVID-19 had a profound impact on sales there in the fiscal second quarter. On Thursday, Starbucks said same-store sales in China during February plunged 78 percent as it closed stores temporarily, reduced opening hours and saw a severe drop off in customer visits. And Starbucks added that it has closed stores and/or has seen reduced visits by customers in additional countries hit by COVID-19: Japan, South Korea and Italy.
Back in China, most Starbucks locations that were closed have been reopened, including the company’s flagship Shanghai Reserve Roastery, which was closed for more than a month.
“I went there and I was so happy to see our partners,” Starbucks China Chairman and CEO Belinda Wong said in a company post. “I wanted to give them a hug but I couldn’t since it was contactless.”
In late January, Starbucks opted not to raise its financial guidance for the fiscal year due to the coronavirus situation, saying at that time that it could not reasonably estimate the impact it will have on its business. China represented 10 percent of Starbucks’ global revenue in the fiscal first quarter of 2020.