Dive Brief:

• Starbucks is increasing the number of drive-thrus in the Central U.S., Southeast and Southwest as it considers its future real estate, Starbucks Chief Operating Officer Roz Brewer said during an earnings call with investors on Tuesday. The chain is looking at different concepts, including drive-thru only stores with no seating, very small units and double drive-thrus, Brewer said.
• Starbucks has also been implementing enhancements to improve drive-thru productivity and ensure baristas can operate efficiently, Brewer said. The company is developing and testing handheld point-of-sale devices, which are at about 300 drive-thru locations. Starbucks expects handhelds to be in 500 stores by the end of February.
• An increased focus on improving the drive-thru experience will only help Starbucks further improve sales. The company's Q1 2021 U.S. comp sales were down 5% compared to being down 9% in the previous quarter, Starbucks CEO Kevin Johnson said during the call.

Dive Insight:

Starbucks is also targeting 150 drive-thru stores that are struggling to meet the chain's new productivity goals, and will renovate the stores by removing the pastry case, creating a single point of sales and other revisions, Brewer said. 

Stores with drive-thrus drove over half of net sales during Q1, increasing more than 10% from pre-pandemic levels, Johnson said. These stores improved the out-the-window times and had positive comps during the quarter, he said. 

"These results give us confidence that our targeted initiatives to unlock capacity and enhance the customer experience at our drive-thru locations are boosting our business recovery while strengthening our foundation for future growth," Johnson said.

Mobile orders, which can also be picked up at the drive-thru, represented 25% of U.S. transactions during the quarter compared to 17% pre-pandemic, Johnson said.  

Starbucks has room for improvement in guest satisfaction, with 89% of guests surveyed in QSR Magazine's 2020 Drive-Thru reporting they were highly or somewhat satisfied by their experience. Eighty-seven percent of guests were satisfied by the speed of service while 93% were satisfied by the order accuracy. Comparatively, Chick-fil-A earned top scores with 93% of guests satisfied by the drive-thru experience. 

Focusing on mobile and drive-thru friendly stores with smaller footprints will also help the chain reach its goal of expanding to 55,000 locations globally by 2030. It began accelerating its timeline for adding more drive-thru locations shortly after the pandemic, and last summer said it planned to close 400 company-operated stores in the U.S. and open more repositioned stores with new formats. The company has also been looking into pickup-only locations, which first launched in New York City in 2019.