Starbucks Shifts Focus to Exurban Areas Amid Changing Consumer Habits

Starbucks is undergoing a significant strategic shift, moving away from dense urban centers and expanding into exurban communities. This move is driven by evolving consumer preferences, particularly the increased demand for drive-through services, which have proven more resilient and profitable in the post-pandemic era.

The Rise of the Drive-Through and Pandemic-Induced Changes

The pandemic fundamentally altered how consumers interact with coffee chains. Research from the University of Texas at El Paso, led by Professor Partha Sarathi Mishra and co-authors Sunil Chopra and Ioannis Stamatopoulos, analyzed store-visit data from 2018 to 2025. The study found that stores without drive-throughs experienced a significant drop in demand during the pandemic and did not fully recover. In contrast, stores with drive-throughs saw only a temporary downturn before rebounding and experiencing increased volume. Mishra described this as a shift in demand volume, noting that for Starbucks, it was as though 25% of total customers migrated from in-store visits to the drive-through.

This change in behavior has made drive-through-equipped locations far more successful, prompting Starbucks to prioritize areas where there is sufficient space for such infrastructure. As Mishra stated, “It seems like they’re recognizing the fact that people have changed their preference to more drive-through stores… So the option is to open more in the suburban areas.”

Urban Store Closures and Exurban Expansion

In line with this strategy, Starbucks has closed approximately two dozen stores in Manhattan and several more in Brooklyn and Queens over recent months. Meanwhile, the company is establishing a presence in exurban communities that previously lacked a Starbucks presence. A notable example is Atoka, Tennessee, an exurb approximately 30 miles outside Memphis with a population of around 10,000—up from fewer than 700 in the 1990s—which recently welcomed its first Starbucks store.

This expansion into exurban markets is not merely about following population growth. Instead, it reflects a deliberate effort to capitalize on the availability of land suitable for drive-through facilities, which are often constrained in denser urban environments due to space limitations and higher costs.

Broader Implications for the Coffee Industry

Starbucks’ shift underscores a larger trend in the food and beverage industry, where convenience and speed are increasingly prioritized by consumers. The success of drive-through models has prompted other chains to reevaluate their real estate strategies, particularly in markets where urban density limits the feasibility of such services.

While Starbucks continues to invest in enhancing the “third place” experience in many of its locations—renovating stores to improve ambiance and comfort—the company’s growth trajectory is now clearly aligned with exurban development, where drive-through accessibility meets rising demand.

As consumer habits continue to evolve, Starbucks’ focus on exurban markets highlights its adaptability to changing market dynamics, ensuring long-term relevance in a competitive landscape.

Starbucks Shifts Focus to Exurban Areas Amid Changing Consumer Habits

Starbucks is undergoing a significant strategic shift, moving away from dense urban centers and expanding into exurban communities. This move is driven by evolving consumer preferences, particularly the increased demand for drive-through services, which have proven more resilient and profitable in the post-pandemic era.

The Rise of the Drive-Through and Pandemic-Induced Changes

The pandemic fundamentally altered how consumers interact with coffee chains. Research from the University of Texas at El Paso, led by Professor Partha Sarathi Mishra and co-authors Sunil Chopra and Ioannis Stamatopoulos, analyzed store-visit data from 2018 to 2025. The study found that stores without drive-throughs experienced a significant drop in demand during the pandemic and did not fully recover. In contrast, stores with drive-throughs saw only a temporary downturn before rebounding and experiencing increased volume. Mishra described this as a shift in demand volume, noting that for Starbucks, it was as though 25% of total customers migrated from in-store visits to the drive-through.

This change in behavior has made drive-through-equipped locations far more successful, prompting Starbucks to prioritize areas where there is sufficient space for such infrastructure. As Mishra stated, “It seems like they’re recognizing the fact that people have changed their preference to more drive-through stores… So the option is to open more in the suburban areas.”

Urban Store Closures and Exurban Expansion

In line with this strategy, Starbucks has closed approximately two dozen stores in Manhattan and several more in Brooklyn and Queens over recent months. Meanwhile, the company is establishing a presence in exurban communities that previously lacked a Starbucks presence. A notable example is Atoka, Tennessee, an exurb approximately 30 miles outside Memphis with a population of around 10,000—up from fewer than 700 in the 1990s—which recently welcomed its first Starbucks store.

This expansion into exurban markets is not merely about following population growth. Instead, it reflects a deliberate effort to capitalize on the availability of land suitable for drive-through facilities, which are often constrained in denser urban environments due to space limitations and higher costs.

Broader Implications for the Coffee Industry

Starbucks’ shift underscores a larger trend in the food and beverage industry, where convenience and speed are increasingly prioritized by consumers. The success of drive-through models has prompted other chains to reevaluate their real estate strategies, particularly in markets where urban density limits the feasibility of such services.

While Starbucks continues to invest in enhancing the “third place” experience in many of its locations—renovating stores to improve ambiance and comfort—the company’s growth trajectory is now clearly aligned with exurban development, where drive-through accessibility meets rising demand.

As consumer habits continue to evolve, Starbucks’ focus on exurban markets highlights its adaptability to changing market dynamics, ensuring long-term relevance in a competitive landscape.