A Starbucks employee works at the register in a store in Austin, Tex., this summer. The company had more than 18,300 stores in North American at the end of June.Brandon Bell/Getty Images
Starbucks SBUX-Q plans to close 250 North American stores later this week.
It is the second big round of store closings under Starbucks chairman and CEO Brian Niccol, who joined the company in 2024. Last September, Starbucks closed 627 stores in North America and Europe.
In a letter to employees, Starbucks chief operating officer Mike Grams said the locations targeted either aren’t delivering acceptable financial results or can’t provide the kind of experience that Starbucks wants for customers and employees.
The company didn’t say Thursday which coffee houses will close or how many are located in the U.S. It also didn’t say how many of the affected coffee houses are unionized. More than 700 U.S. Starbucks stores have voted to unionize since late 2021, but the union and the company have yet to reach a labour agreement.
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Grams said Starbucks is continuing to retrofit its North American coffee houses to make them cozier and more inviting. The company expects 1,500 stores will be retrofitted by Sept. 30, which is the end of Starbucks’ fiscal year.
“This progress has given us a clearer view of the performance of every coffeehouse,” Grams said in his letter. “While most are benefiting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you.”
Grams said Starbucks is still committed to growing its store count in North America. At the end of June, the company had 18,371 stores in the region.
Starbucks said it will transfer employees to other stores if possible or provide severance support if it’s not able to place an employee in another location.
Starbucks has also been cutting its corporate ranks. The company laid off 900 non-retail employees when it closed stores last September. In May, Starbucks laid off an additional 300 corporate employees and closed some underused U.S. offices.
The company said it will incur US$300-million in restructuring charges with this round of closings, including US$200-million in cash charges as it exits leases and pays employee separation benefits and US$100-million in non-cash charges due to the disposal and impairment of coffeehouse assets.
Starbucks shares fell less than 1 per cent Thursday in morning trading.
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