Starbucks To Shut 250 North American Stores As Underperformance Triggers Major Network Review

Starbucks is set to shut down 250 of its coffee shops across North America later this week as part of an assessment of its store network.

In a message to employees, Starbucks Chief Operating Officer Mike Grams said the stores being closed had either failed to meet the company’s financial expectations or were unable to deliver the experience Starbucks aims to offer both customers and staff.

The company did not disclose which locations would be affected or specify how many of the closures would be in the United States. It also did not reveal how many of the stores are unionized. Since late 2021, more than 700 Starbucks locations in the US have voted to unionize. However, Starbucks has opposed the organizing drive, and the company and the union have not yet reached a collective bargaining agreement.

Grams said Starbucks is continuing its efforts to redesign and upgrade its North American stores, with the aim of creating spaces that feel more comfortable and welcoming. The company expects to complete renovations at about 1,500 locations by September 30, the final day of its 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.”

Despite the closures, Grams said the company remains focused on expanding its presence across North America.

For employees affected by the shutdowns, Starbucks said it will try to move them to other nearby locations where positions are available. Those who cannot be reassigned will receive severance assistance.