Starbucks tests smaller café prototypes to reclaim social atmosphere

Starbucks is testing a new, smaller café prototype designed to fit into expensive urban real estate while maintaining the brand’s traditional coffee house experience. A recent pilot in San Antonio features a “folded bar” counter configuration to accommodate narrower spaces, yet still includes plush seating, bakery displays, and an espresso bar.

This strategy is part of a broader effort led by CEO Brian Niccol to recapture the “third place” energy—a social atmosphere that the company had previously moved away from in favor of mobile app pickups and quick service. Under previous management, the chain had removed thousands of comfortable seats and electrical outlets, which contributed to declining sales.

As part of a $1 billion restructuring plan, Starbucks is also renovating existing locations to reintroduce cozy seating, power outlets, and free refills. To date, 1,500 locations in North America have undergone redesigns to encourage customers to stay and socialize.