Starbucks Coffee Company announced today that it will close approximately 250 North American stores later this week.
This represents about 1% of the Seattle coffee giant’s more than 18,000 North American coffee shops.
The company said it reviewed its North American portfolio and identified locations where it is unable to deliver the customer experience it wants, or where there’s no path to acceptable financial performance.
Why is Starbucks closing these stores?
In a statement on the company’s website, Chief Operating Officer Mike Grams said the decision was made in support of the coffee chain’s Back to Starbucks strategy.
Starbucks said it will support employees through the transition, offering transfer opportunities where possible. For any employees who can’t be transferred to other coffee shops, Starbucks will provide severance support.
This move is part of a strategic restructuring of the brand’s North American footprint.
Why does this sound familiar?
Last September, the coffee chain cut 900 corporate roles and reduced its North American store footprint by about 1%, ending the fiscal year with around 18,300 locations.
At the time, Starbucks Workers United reported that 59 of those locations were unionized. Since 2021, nearly 700 U.S. Starbucks locations have voted to unionize.
The closures are part of CEO Brian Niccol’s Back to Starbucks turnaround strategy. The former Chipotle CEO announced the strategy on his second day in his new role at Starbucks in September 2024.
Improving the customer experience and making cafes more welcoming were two primary goals outlined in the plan. Within the last two years, the coffee chain has redesigned 1,500 of its cafes to make them more inviting and simplified its menu to improve order-delivery speed.
Which Starbucks stores are closing?
Starbucks’s news release did not identify specific locations. Fast Company reached out to the coffee chain for additional details on stores that will close.
In a regulatory filing, Starbucks said it now expects about 440 net new coffee shop openings globally this fiscal year, down from its earlier target of 600 to 650 openings.
“[Starbucks] continues to see significant longer-term growth opportunity ahead in North America and is actively developing a strong pipeline of new coffeehouses,” the company said in the filing.
The coffee chain expects most of the closures to be completed by the end of fiscal year 2026 and to incur approximately $300 million in restructuring charges, of which around $200 million will be related to lease exit costs and employee separation benefits.
Shares of Starbucks Corporation (Nasdaq: SBUX) were basically flat when markets opened on Thursday. The stock is up roughly 12% year to date.
