Starbucks plans to shutter 250 North American stores in what is the second round of closures under its new corporate leadership following decades of seemingly endless expansion.
Starbucks Chairman and CEO Brian Niccol, who joined the company in 2024, also oversaw the closure of a whopping 627 stores in North America and Europe last September, the Associated Press reported Thursday.
In a letter to employees, Starbucks Chief Operating Officer Mike Grams said the locations to be closed aren’t delivering acceptable income or are missing the kind of experience that Starbucks wants for customers and employees, according to the AP report.
The closures, however, represent only a tiny slice of Starbuck’s reach worldwide. As of late June this year the Seattle company reported more than 41,000 company-operated and licensed locations across 90 markets.
In announcing the closures Thursday the company did not say which coffeehouses were being shuttered or how many were in the U.S.
The company did not say if unionization by workers figured into the decision.
According to AP:
Starbucks Workers United, which represents workers at the 700 company-owned U.S. Starbucks stores that have voted to unionize, said 20 unionized stores are among the 250 that are closing, or 8% of the total. Starbucks stores have been voting to unionize since late 2021, but the union and the company have yet to reach a labor agreement.
The company has embarked on a plan to retrofit its North American outlets to “make them cozier and more inviting,” as AP described the effort. It expects 1,500 stores to be retrofitted by the end of this month.
“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 expansion in North America. At the end of June, the company had 18,371 stores in the region, according to AP’s report.
The company said employees at the closing stores will be transferred to other outlets if possible or given severance pay if a transfer is not available.
Corporate ranks have also been cut. Some 900 non retail employees were laid off in the last big closure, and in May an additional 300 corporate employees were let go.
Former CEO Howard Schultz, who bought Starbucks in 1987 and is credited with turning it into the global behemoth is has become, in 2024 commented on the Seattle coffee giant’s drop in revenue that year.
He urged senior leaders, including board members, to spend more time talking to baristas in the company’s stores and focusing on offering popular drinks.
“I have emphasized that the company’s fix needs to begin at home: U.S. operations are the primary reason for the company’s fall from grace,” Schultz said. “The stores require a maniacal focus on the customer experience, through the eyes of a merchant. The answer does not lie in data, but in the stores.”
Breitbart contributor Lowell Cauffiel is the best-selling author of the Los Angeles crime novel Below the Line and nine other crime novels and nonfiction titles. See lowellcauffiel.com for more.
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