Starbucks' far-reaching reorientation, titled "Back to Starbucks", continues. The Seattle-based coffee company announced on Thursday that it would close 250 stores in North America this week. This marks the second wave of mass closures since Brian Niccol took over as Chairman and CEO in 2024.
Mike Grams, Starbucks' Chief Operating Officer, stated in a letter to employees that the affected locations are financially underperforming or are unable to provide the experience Starbucks desires for customers and staff, as reported by the Associated Press. The exact locations among the approximately 18,300 Starbucks outlets in North America that are affected were not specified.
Extensive Restructuring Measures
This latest wave of closures follows a similar measure just over a year ago, when Starbucks shed 627 North American and European stores, as well as 900 non-customer-facing employees. In May of this year, the company also announced a further 300 redundancies of US corporate staff and the closure of underutilised regional offices.
These decisive steps to revitalise the brand are part of Niccol's one-billion-dollar restructuring plan. The measures became necessary due to declining sales, increased competition, and a growing wave of unionisations among sales staff. The Starbucks Workers United union was founded at the end of 2021 and has expanded to 700 US stores. To date, no collective bargaining agreement has been reached between the union and Starbucks.
Adjustments and Market Developments
In addition to store closures, the company-wide restructuring includes thousands of store renovations – 1,500 of which are expected to be completed by 30 September, according to Grams. In his letter, he emphasised that the company remains committed to increasing the number of its North American stores. The progress has given the company "a clearer view" of the performance of its coffee houses. Grams wrote in his letter: "Whilst most are benefiting from this overall momentum, some coffee houses continue to underperform despite the hard work and dedication of all of you."
Last year, Starbucks topped the list of chain store closures in New York City, having exited a total of 42 locations in the "Big Apple" between late 2024 and late 2025. Retail analysts explained to Commercial Observer that the closures of popular urban locations were due to their small footprints, which complicate modernisations, as well as the decline in footfall post-pandemic. Both factors differentiated the urban coffee houses from their drive-through counterparts.
