Starbucks plans to close 250 stores in North America this week. This is the second time Starbucks has taken such a significant action since September last year.
In an announcement released on September 24, Mike Grams, Chief Operating Officer of Starbucks, stated, “We have carefully reviewed the café business in North America and identified certain stores that we believe cannot continue to provide the ideal experience for customers and partners or achieve acceptable financial performance. As a result, we will be closing approximately 250 cafes later this week. This represents about 1% of our total of over 18,000 cafes in North America.”
Brian Niccol, Chairman and CEO of Starbucks, joined the company in 2024. Last September, Starbucks closed 627 stores in North America and Europe and laid off 900 non-retail employees.
In the announcement on Thursday, Starbucks did not disclose which stores will be closed, nor did it specify how many are located in the United States. Additionally, the company did not reveal how many of the affected stores have unionized members. Since the end of 2021, over 700 Starbucks stores in the U.S. have voted to unionize, but Starbucks does not support this unionization effort, and an agreement between the union and the company has not been reached yet.
Grams stated that Starbucks is continuing its transformation of its North American stores to make them more warm and comfortable. The company expects to complete renovations of 1,500 stores by September 30.
Grams wrote in the announcement, “This development has given us a clearer understanding of the performance of each café. Most cafes have benefited from this overall momentum, but despite everyone’s hard work, the performance of some cafes remains unsatisfactory.”
Grams stated that Starbucks remains committed to increasing its number of stores in North America.
“As part of our store portfolio management, we close some stores and open new ones every year,” he said. “We are confident in the significant long-term growth opportunities in the North American market. We are actively building a pipeline of high-quality new store projects and are firmly committed to growth in North America.”
Starbucks stated that the company will try to relocate affected employees to other locations as much as possible; if unable to place employees elsewhere, severance pay will be provided.