Starbucks may be on the verge of closing five additional stores in New York City, continuing a trend that kicked off in the fall, with the Chinese competitor Luckin Coffee reportedly considering these vacant locations.
James Famularo, president of Meridian Retail Leasing, which handles the properties, suggested that more closures could occur early next year.
A source familiar with Starbucks’ future plans, who wished to remain unnamed, mentioned that it is likely five stores will shutter as their leases won’t be renewed.
“I doubt Starbucks has opened as many stores as they’ve closed in New York,” the individual shared.
In a significant move, 34 Starbucks locations in the city abruptly shut their doors on September 25, following six consecutive quarters of declining sales for the brand.
In contrast, Luckin Coffee seems to be expanding quickly, adding nine locations in New York City over just seven months, according to various real estate professionals collaborating with the chain.
Starbucks runs over 26,000 locations worldwide, and brokers indicated that they are contemplating several properties, including smaller takeout venues that have recently closed.
Luckin Coffee, offering beverages at around 30% less than Starbucks, has been actively competing with the Seattle-based chain in efforts to grow its market share in Asia.
Famularo commented on the ongoing negotiations involving Luckin, noting, “We have over a dozen spaces being evaluated by them. It wouldn’t be surprising if, in a year, Luckin has significantly increased their presence.” This marks a notable level of activity on their part.
Luckin has yet to respond to inquiries for comment.
The Chinese chain operates small cafes ranging from 700 to 1,000 square feet, where customers usually need to place their orders in advance.
Starbucks, however, focuses on creating spaces where customers can relax and socialize—elements of the café experience that have traditionally drawn people in.
Starbucks is planning to reopen its West 1585 Broadway location in Manhattan, which had temporarily closed during renovation efforts led by Morgan Stanley, though no other new openings are presently on their schedule.
Sam Jeffries, a spokesperson for Starbucks, stated, “We continuously assess our coffeehouse portfolio to ensure we’re meeting our customers’ needs. Shuttering and opening new stores is a usual part of our operations.”
The unexpected wave of closures this year has stirred concern in the real estate sector. Once seen as a key tenant that would enhance foot traffic and ensure steady rent, the sudden closings caught many off-guard. Jeffrey Roseman from Newmark Retail recounted how signs appeared overnight without prior notice to landlords or building managers—“There was absolutely no warning.”
Starbucks led all U.S. retail chains this year in closures, totaling 42 stores in New York City, as per the Urban Future Center.
According to a nonprofit report, the number of Starbucks in the five boroughs has dropped from 351 in 2019 to 286 now.
This New York City closure trend aligns with a broader $1 billion restructuring initiative aimed at shutting down 400 locations nationwide and laying off 900 employees.
Experts believe Starbucks has struggled to bounce back from the impacts of the pandemic, despite more employees returning to work and less frequent coffee purchases.
Businesses have turned to enhancing workplace amenities, like installing espresso machines, as they attempt to coax employees back to the office.
“If you’re a regular Starbucks visitor who used to stop by five days a week, you might only be going three times now,” shared a source familiar with the situation. “Stores that were once solidly profitable are seeing declines. It all accumulates and really matters.”
