Starbucks cuts 250 locations to back higher-potential stores

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Photo by David Paul Morris/BloombergStarbucks Corp. is closing 250 underperforming locations across North America to focus on stores with higher potential.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe closures, which will happen this week, represent about one per cent of the company’s 18,000-location footprint across the United States and Canada. Starbucks has been pruning its portfolio as part of a broader push to bolster sales and profit, betting it can steer customers to locations that offer better service and stronger results. Longer term, the company plans to resume expanding its footprint.Starbucks “identified locations where we do not believe we can consistently deliver the experience we want for customers and partners or where we don’t see a path to acceptable financial performance,” chief operating officer Mike Grams said in a message to company employees.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againThe closures follow a separate round of closures announced last September, when Starbucks said it would shutter hundreds of North American stores as chief executive Brian Niccol moved to right-size the chain. The company targeted locations where it saw no path to profitability, while focusing on stores that aligned with Niccol’s push to make its cafes more inviting places to visit.The company will incur US$300 million in restructuring charges from the latest store closures, according to a filing. Net openings for this fiscal year will be 440 locations, down from previous guidance of as many as 650.Shares of Starbucks were little changed in premarket trading on Thursday. The stock had gained about 12 per cent this year through Wednesday, compared with a roughly 13 per cent gain for the S&P 500.Starbucks has emerged from a sales slump in recent quarters after focusing on store upgrades, improved customer service, more relevant marketing and a revamped menu — all part of Niccol’s turnaround plan. Growth at established locations surpassed expectations last quarter, and analysts polled by Bloomberg expect the momentum to continue.“This progress has given us a clearer view of the performance of every coffeehouse,” Grams wrote. Still, “while most are benefiting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you.”Starbucks will offer transfers to workers at closing stores where possible. Those who can’t be reassigned will receive severance, according to the message.The chain closed its latest fiscal year, ended Sept. 28, 2025, with fewer stores in North America as it shuttered dozens of locations even as it opened hundreds of others.Starbucks has said that it’s planning to rebuild its U.S. store pipeline, seeking to open about 400 net new company-operated locations in its 2028 fiscal year. That excludes stores operated by partners such as grocery stores and airports. In the long run, Starbucks has said it could add at least 5,000 stores in the U.S. alone.“We are actively developing a strong pipeline of new coffeehouses and remain committed to growth in North America,” Grams wrote.We apologize, but this video has failed to load.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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