Starbucks Closes 250 Stores in Second Round of Closures
Starbucks plans to close 250 North American stores, marking its second round of store closures under new leadership.
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Starbucks has announced plans to close 250 stores in North America, marking the second round of store closures under its new corporate leadership. This follows the closure of over 600 locations in the previous year, as reported by the Associated Press. The decision comes as part of a broader strategy to streamline operations and improve the customer experience.
Leadership and Strategic Shifts
Starbucks Chairman and CEO Brian Niccol, who joined the company in 2024, oversaw the closure of 627 stores in North America and Europe last September. In a letter to employees, Chief Operating Officer Mike Grams stated that the locations being closed are not delivering acceptable income or meeting the company’s standards for customer and employee experience.
The closures represent a small portion of Starbucks’ global footprint, with over 41,000 company-operated and licensed locations across 90 markets as of late June this year. The company did not specify which stores are closing or how many are in the U.S., nor did it mention the role of unionization in the decision.
Unionized Stores and Labor Issues
Starbucks Workers United, which represents workers at 700 U.S. stores that have voted to unionize, stated that 20 of the unionized stores are among the 250 that are closing, accounting for 8% of the total. Despite ongoing unionization efforts since late 2021, the company and the union have not yet reached a labor agreement.
Retrofitting and Future Plans
Starbucks has embarked on a plan to retrofit its North American outlets to make them ‘cozier and more inviting.’ The company expects 1,500 stores to be retrofitted by the end of the month. Grams emphasized that while most stores are benefiting from this momentum, some continue to underperform despite the efforts of employees.
Starbucks remains committed to expansion in North America, with 18,371 stores in the region as of the end of June. Employees at the closing stores will be transferred to other outlets if possible or receive severance pay if a transfer is not available. The company has also reduced its corporate ranks, with 900 non-retail employees laid off in the previous closure and an additional 300 corporate employees let go in May.
Former CEO Comments
Former CEO Howard Schultz, who played a pivotal role in transforming Starbucks into a global brand, commented on the company’s revenue decline in 2024. He urged leaders to focus more on customer experience and the needs of baristas in stores, emphasizing that the company’s solution must begin at home with U.S. operations.
Source: Breitbart
