Starbucks to Close 250 North American Stores

Starbucks is set to shut down 250 locations across North America, marking the second round of closures since new leadership took over. This comes after years of rapid expansion for the company.

Brian Niccol, the company’s Chairman and CEO since 2024, previously managed the closure of 627 stores in North America and Europe last September, as reported by the Associated Press.

In a letter to employees, Chief Operating Officer Mike Grams explained that the stores being closed are either not generating satisfactory income or fail to provide the desired experience for customers and staff, according to the AP report.

Despite the closures, it is worth noting that they represent only a small fraction of Starbucks’ global presence. As of late June, the Seattle-based company reported over 41,000 company-operated and licensed locations in around 90 markets.

When announcing the closures, Starbucks did not detail which specific locations would be affected or how many of them are in the United States.

The company also did not specify whether the existence of unions among its workers played a role in the decision. However, it was noted that Starbucks Workers United, representing workers at the 700 unionized Starbucks locations in the U.S., indicated that 20 of the closing stores are unionized, making up about 8% of the total closures. Starbucks has been facing unionization efforts since late 2021, yet there hasn’t been a finalized labor agreement between the union and the company.

Starbucks has initiated plans to renovate its North American outlets to create a cozier atmosphere, as described by the AP. They anticipate having 1,500 stores updated by the end of the month.

Grams mentioned in his letter that this progress provides a better understanding of how each coffeehouse is performing. He acknowledged that while most stores are doing well, some continue to fall short despite the hard work from the team.

Grams also highlighted that Starbucks remains committed to growth in North America, stating there were 18,371 stores in the region as of late June.

For employees in the closing locations, the company plans to transfer them to other stores when possible, or offer severance pay if not.

There have also been cuts at corporate levels. Approximately 900 non-retail employees were laid off during the last round of closures, followed by an additional 300 corporate layoffs in May.

Former CEO Howard Schultz, who played a pivotal role in transforming Starbucks into a global powerhouse, commented on the company’s revenue decline in 2024. He urged company leaders, including board members, to engage more with baristas and focus on enhancing popular drink offerings.

“I have stressed that the solution starts at home: U.S. operations are the main reason for the company’s decline,” Schultz stated. “The stores need a strong focus on customer experience, seen through the perspective of a merchant. It’s not all about data; it’s about what happens in the stores.”