Starbucks to Close 250 North American Stores This Week
Starbucks plans to close 250 North American stores later this week in the second major round of store closures under Chairman and CEO Brian Niccol. According to a letter from Chief Operating Officer Mike Grams, the targeted locations either fail to deliver acceptable financial results or cannot provide the desired customer and employee experience. The closures involve restructuring charges totaling $300 million.
Financial Performance and Store Closures
The upcoming closures mark the second large-scale contraction under Niccol’s leadership following a sweeping corporate consolidation last September that shuttered 627 stores across North America and Europe alongside 900 non-retail layoffs. In May, the company eliminated another 300 corporate positions and closed underused U.S. offices. Grams stated in his letter that ongoing efforts to retrofit North American coffeehouses have provided management with a clearer performance metric for every site. While most locations benefit from the momentum, underperforming sites face permanent closure.
To cover the costs of these exits, Starbucks reported it will incur $300 million in restructuring charges. This sum comprises $200 million in cash expenses associated with lease terminations and employee separation benefits, alongside $100 million in non-cash charges tied to the disposal and impairment of coffeehouse assets.
Labor Impacts and Union Response
The exact list of closing locations and the precise breakdown of U.S. versus Canadian sites remain undisclosed by corporate leadership. Starbucks Workers United, an organization representing workers at the 700 company-owned U.S. stores that have voted to unionize since late 2021, reported that 20 unionized locations are included in the 250 closures, representing roughly 8% of the total shuttered stores. No collective bargaining agreement has been reached between the union and the company.
In response to the announcement, Starbucks Workers United filed a formal request for information concerning the shutdown parameters and signaled intentions to engage in bargaining at every affected unionized store. For workers displaced by the closures, corporate leadership stated that affected employees will be transferred to alternative stores where feasible, or provided with severance support if relocation is not possible.
Corporate Restructuring and Market Response
Despite trimming the store count and corporate headcount, Starbucks leadership maintains that the company remains committed to long-term network growth across North America. Starbucks shares fell less than 1% during afternoon trading following the release of the restructuring details.
