Starbucks to Close 250 North American Stores This Week

Starbucks plans to close 250 North American stores later this week, continuing a strategic consolidation under CEO Brian Niccol. This move follows a larger closure of 627 stores in North America and Europe last September.

In a letter to employees, Starbucks Chief Operating Officer Mike Grams stated that the targeted locations are either not meeting financial expectations or failing to provide the desired customer and employee experience. The company has not yet specified which coffeehouses will be affected or how many are located in the U.S.

Starbucks is also undergoing a broader initiative to retrofit its North American stores to enhance their atmosphere. The company anticipates that 1,500 stores will be updated by September 30, the end of Starbucks' fiscal year. Grams noted that while most stores are benefiting from current momentum, some continue to underperform despite staff efforts.

At the end of June, Starbucks operated 18,371 stores in the region. For employees impacted by the closures, Starbucks intends to transfer them to other locations where possible, or provide severance support if placement is not feasible.

This wave of store closures comes amid broader cost-cutting measures and corporate layoffs. In September, Starbucks laid off 900 non-retail employees. In May, an additional 300 corporate employees were let go, and some underutilized U.S. offices were closed. The company expects these latest closures to result in approximately $300 million in restructuring charges, including $200 million in cash expenses for lease exits and employee benefits, and $100 million in non-cash charges related to asset disposal and impairment. Starbucks shares saw a slight decrease of about 1% on Thursday.