Starbucks plans to close 250 underperforming coffeehouses across North America in a fresh round of cutbacks under Chairman and CEO Brian Niccol.
The move marks the second major wave of shutdowns since Niccol took the helm in 2024, following the closure of 627 stores in North America and Europe last September.
Breitbart reported the Seattle company is targeting locations that fail to deliver acceptable income or the experience it wants for customers and employees, even as it keeps pushing expansion plans for the region.
Most of the new closures are expected by the end of fiscal 2026. They represent roughly 1 percent of the chain’s North American footprint and will bring about $300 million in restructuring charges.
Chief Operating Officer Mike Grams laid out the rationale in a letter to employees. The company said progress on traffic and sales has sharpened its view of every coffeehouse.
Grams wrote that while most locations are gaining from the overall momentum, others still lag.
“While most are benefiting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you.”
In a separate note captured by Just The News, Grams added that closing any coffeehouse is a difficult decision and that the news would be hard for the partners, customers, and communities affected.
Affected store employees will be offered transfers where possible. Those who cannot move will receive severance. The company did not identify the specific stores or break out how many of the 250 sit inside the United States.
The New York Post noted the same focus on poor financial results and inadequate customer or employee experiences as the drivers for the latest cuts.
Last September’s 627 closures already thinned the network across North America and Europe. Corporate ranks took hits as well. The company laid off 900 non-retail employees in that earlier round and cut another 300 corporate jobs in May.
Niccol’s team is also retrofitting outlets. About 1,500 North American stores are expected to receive upgrades by the end of this month as part of the effort to improve the in-store experience.
As of late June, Starbucks reported more than 41,000 company-operated and licensed locations across 90 markets worldwide, including 18,371 stores in North America. The new closures will leave the bulk of that network intact while the company lowers its net new store opening target.
Major consumer brands keep facing operational and policy resets that hit customers directly, much like the nationwide changes that followed Starbucks’ decision to drop DEI hiring practices in a Florida settlement.
Reuters described the latest store cuts as a sensible but costly step in the turnaround. Global market strategist Lale Akoner of eToro called it exactly that.
Former CEO Howard Schultz, who bought the company in 1987 and built it into a global brand, pointed to deeper problems in 2024 after revenue dropped.
Schultz told senior leaders the fix had to start at home.
“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.”
He pressed for a merchant’s eye on the customer experience rather than reliance on data alone.
“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.”
Schultz also urged board members and executives to spend more time talking with baristas and focusing on popular drinks. Those comments landed as the company was already wrestling with weaker results and the first big round of store closures under new leadership.
Corporate shake-ups of this scale often spill into talent exits and strategy resets across big firms, a pattern also visible when a top Meta AI researcher walked away after one year.
Starbucks Workers United represents workers at the 700 company-owned U.S. stores that have voted to unionize since late 2021. The union said 20 of those organized locations are among the 250 set to close, or about 8 percent of the total.
The company has not said whether unionization played any role in the selection of stores. The two sides have yet to reach a labor agreement.
Grams maintained that Starbucks remains committed to growth in North America even while it prunes underperformers. The chain is still investing in the stores it keeps open and continues to treat the region as central to its future.
Economic pressures on wages, rents, and household costs continue to shape the environment in which retailers operate, a dynamic underscored by a Brookings report on how Biden-era migration affected average wages and rents.
Two large closure rounds in roughly a year, hundreds of corporate jobs eliminated, hundreds of millions in restructuring charges, and a lowered store-opening goal all point to a company still correcting course. The 250 stores form a small slice of the North American total, yet the cumulative effect is visible on the ground for workers, customers, and local commercial strips.
Starbucks has not released the list of addresses or a full U.S. versus Canada breakdown for the new wave. Severance terms beyond the transfer-or-pay option were not detailed. The precise split of last September’s 627 closures between North America and Europe also remains unstated in the available figures.
High-profile companies keep landing under fresh legal and regulatory scrutiny over how they handle consumers, a pressure that has already reached platforms such as the case in which Florida’s attorney general sued Netflix over alleged tracking and sale of children’s data.
Trade and supply-chain friction can add further strain on large retail networks that depend on cross-border flows, conditions that have already prompted steps such as the DOJ antitrust division’s freeze on cooperation with Canada.
For now the public record shows a giant coffee chain cutting locations that fail its own income and experience tests, paying the restructuring bill, and telling employees the remaining stores must deliver. Customers will decide with their feet whether the refocus works.
Empty storefronts and severance checks are the market’s blunt way of reminding every big brand that ideology and bureaucracy never refill a cash register.
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