Shares of Starbucks (SBUX -1.83%) opened sharply lower on Thursday, as growing concerns about the effects of the novel coronavirus pandemic on businesses and the economy drove a broad-based market sell-off.
As of 11 a.m. EDT, Starbucks shares were down about 7% from Wednesday's closing price.
Like just about every business with a retail presence, Starbucks is exposed to the growing likelihood that customer foot traffic will decline sharply as people stay home to try to slow the spread of COVID-19.
To its credit, Starbucks has moved quickly to try to respond to virus-related concerns:
- For customers, CEO Kevin Johnson said the company will implement protective measures at its stores on a store-by-store basis as needed. Those could include removing tables to increase distances between patrons, expanding mobile order-and-pay capabilities, and if necessary, converting some stores to drive-through-only stations.
- For employees, there's a new "catastrophe pay" provision, under which employees diagnosed with COVID-19 will get 14 days to "self-quarantine" at full pay, while those showing symptoms will get three paid days of paid leave after a 24-hour self-quarantine.
For Starbucks investors, the thing to do now is to watch and wait. The company seems to have done what it can to be ready for a fast-growing pandemic; the question is, how long will it last?