Starbucks to Close 250 More Locations Shortly – CoffeeTalk

Starbucks is set to close around 250 locations as part of its ongoing efforts to trim its store count amid a strategic turnaround. According to a company statement, the closures pertain to locations that failed to provide the desired experience for customers and partners, or are not financially viable, representing about 1% of Starbucks’ approximately 18,000 locations in North America. CEO Brian Niccol previously announced a similar closure strategy, accompanied by corporate layoffs, as part of a $1 billion restructuring initiative aimed at revitalizing the brand and fostering growth.

In this context, various strategies have been introduced, including café renovations, enhanced service, and a streamlined menu. However, the company will face around $300 million in costs associated with these closures, including $200 million for early lease terminations and severance payouts to affected employees.

Though specific site closures have not yet been disclosed, patrons will notice signage at impacted stores soon, with updates also reflected in the Starbucks app. Chief Operating Officer Mike Grams reassured employees in a letter that the company is optimistic about long-term growth opportunities in North America, while actively working on a robust pipeline of new coffeehouses.

Nevertheless, Starbucks has adjusted its projection for global openings, now expecting to inaugurate about 440 new locations in the fiscal year, a reduction from the earlier target of 600 to 650 new stores. Despite these challenges, Starbucks reported a resurgence in sales growth, with same-store sales climbing by 7.9% at US locations during the last quarter, indicating a trend of increasing momentum that Niccol highlighted in the company’s earnings report from July.

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