Starbucks CEO on Q2 earnings contact free service the path to reopening and more

Starbucks CEO on Q2 earnings, contact-free service, the path to reopening and more

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Starbucks CEO Kevin Johnson joins “Squawk on the Street” to discuss quarterly earnings results, the coronavirus impact, reopening stores, keeping employees and customers safe and more.

Starbucks CEO Kevin Johnson on Wednesday detailed how the coffee chain plans to operate U.S. cafes. as it moves to reopen “a significant number” of stores next week.

Roughly half of Starbucks’ U.S. company-operated locations are closed. Those that have remained open during the pandemic have had drive-thru only service, Johnson said on CNBC’s “Squawk on the Street.”

Johnson said Starbucks plans to have over 90% of its company-operated U.S. locations open by early June.

As cafes reopen, Johnson said they will begin to offer mobile ordering for pickup.

“And in this pickup, we have a contact-less handoff that’s at the entryway,” he said. “And in other cases, we’ve got mobile order for drive-thru.”

Mobile order also will be expanded for curbside pickup, he said. And in certain cities where it can be done safely, to-go ordering could be offered, he added.

“We’re going to begin there. What consumers are looking for are experiences that are safe, familiar and convenient,” Johnson said.

Johnson’s comments came one day after Starbucks reported fiscal second-quarter earnings. The company saw same-store sales fall 10% as the coronavirus pandemic intensified and warned of a rocky third quarter ahead.

Shares of Starbucks were down around 2% on Wednesday to roughly $77 each. The broader market was higher following positive news on a potential Covid-19 treatment from Gilead Sciences.

Johnson said he is confident that U.S. stores will have the capacity to handle the modified service, noting that to-go orders made up a substantial share of its pre-Coronavirus business.

“All we’ve done is just sort of modified the way that they order through mobile ordering and the pickup,” he said.

Johnson said Starbucks will closely monitor localized data on Covid-19 cases, using it to determine whether it can further modify service in certain locations to offer limited in-store seating, for example.

“It’s going to take some time for a vaccine or the appropriate treatments to be available for Covid-19, so we’re going to be in the monitor-and-adapt phase while that happens,” Johnson said.

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