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Company News

UPDATE 2-Starbucks halts dine-in service, focuses on "to go" in U.S., Canada

(Adds details from Tim Hortons in paragraph 6; updates shares)

March 16 (Reuters) - Starbucks Corp closed its dine-in areas for at least two weeks at its U.S. and Canadian stores and shifted completely to “to go” service, as restaurants look to curb the rapid spread of the coronavirus outbreak.

The world's largest coffee chain said bit.ly/38R0kbF on Sunday it would also temporarily close stores in communities with high numbers of coronavirus cases, as well as malls and university campuses.

The unprecedented move comes as authorities in New York, Los Angeles and other global cities shut down bars, restaurants, theaters and cinemas to combat the pandemic.

New York Mayor Bill de Blasio said on Sunday he was ordering restaurants, bars and cafes to sell food only on a take-out or delivery basis.

Burger chain Shake Shack Inc said on Monday it would temporarily shift to a take-out model in all its U.S. company-owned restaurants and withdrew its 2020 forecasts, citing “unprecedented market conditions.”

Canada’s coffee and breakfast chain Tim Hortons, owned by Restaurant Brands International Inc, has decided to close dining-room seating in most locations from Tuesday to focus on take-out, drive-thru and delivery service.

The coronavirus outbreak, which originated in China, has killed 60 people and infected over 3,600 in the United States. Globally, the virus has infected over 169,000 people and killed more than 6,500.

“The situation with COVID-19 is extremely dynamic and we will continue to review the facts and science and make the proactive decisions necessary,” said Rossann Williams, president of Starbucks’ U.S. company-operated and Canada businesses.

The company had warned of a hit to second-quarter from the outbreak in China, with same-store sales there falling about 50%.

Starbucks had earlier stopped accepting reusable cups and thermos flasks from customers in Europe, the Middle East and Africa after announcing a similar policy in the United States.

Shares of Shake Shack fell 13% and Starbucks 11.2%, while U.S.-listed shares of Restaurant Brands were down 14.2% in a broader market slump. (Reporting by Praveen Paramasivam in Bengaluru; Editing by Sriraj Kalluvila and Arun Koyyur)

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