Starbucks plans to close 250 North American stores later this week.
It is the second big round of store closures 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 coffeehouses will close or how many are located in the US.
Starbucks Workers United, which represents workers at the 700 company-owned US Starbucks stores that have voted to unionise, said 20 unionised stores are among the 250 that are closing, or 8 per cent of the total. Starbucks stores have been voting to unionise since late 2021, but the union and the company have yet to reach a labour agreement.
Grams said Starbucks is continuing to retrofit its North American coffeehouses to make them cosier and more inviting. The company expects that 1,500 stores will be retrofitted by September 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 would transfer employees to other stores if possible or provide severance support if it is not able to place an employee in another location. Starbucks Workers United said Thursday it is sending a formal request for information to Starbucks about the planned closures and will engage in bargaining at every unionised store.
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 US offices.
The company said it will incur US$300 million in restructuring charges with this round of closures, 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 1.0 per cent Thursday in afternoon trading.
AP
