Starbucks seeks rent relief for next 12 months
Starbucks is asking its landlords for a break on rent as COVID-19 takes a toll on sales.
In a letter to landlords that the coffee giant sent earlier the month, the company asked them to “adapt to new realities” — including an anticipated $225 billion hit to the American restaurant industry during the next three months, reported The Seattle Times.
“Effective June 1 and for at least a period of 12 consecutive months, Starbucks will require concessions to support modified operations and adjustments to lease terms and base rent structures,” read the letter, which was signed by Starbucks COO Roz Brewer, according to the report.
Starbucks’ second-quarter global same-store sales fell 10% amid a 13% decline in transactions for its second quarter, which ended March 29. The company warned it expected the negative financial impacts of COVID-19 to be significantly greater in the third quarter.
With more U.S. locations than nearly any other chain, Starbucks’ request for rent relief could have widespread ripple effects on commercial property and mortgage markets if implemented nationally, noted the Seattle Times.
Starting on May 4, Starbucks began opening its stores in the U.S. and Canada, with expectations of having approximately 90% of all company-operated U.S. Starbucks stores reopened by early June in various formats, with an emphasis on mobile order and take-out. Customers will not be allowed inside most of the locations.