Starbucks vows transfer opportunities and severance support for affected workers
Starbucks has announced that it will close approximately 250 stores in North America later this week that are no longer meeting the coffeehouse chain's expected financial performance.
The closures, announced by Starbucks chief operating officer (COO) Mike Grams, represent approximately one per cent of its more than 18,000 coffeehouses in North America.
"We have carefully reviewed our North America coffeehouse portfolio and 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," Grams said.
In its filing with the US Securities and Exchange Commission, Starbucks said the closures will be completed by the end of fiscal year 2026, with approximately $300 million of restructuring charges to be incurred.
Starbucks anticipates that approximately $200 million of the restructuring charges will be primarily related to lease exit costs and employee separation benefits.
"Closing any coffeehouse is a difficult decision, and we know today's news will be hard for the partners, customers and communities affected," Grams said.
Affected employees will be receiving support through the transition, according to the COO. This includes transfer opportunities wherever possible, as well as severance support for employees who will not be redeployed to other stores.
"To the partners in those coffeehouses impacted by today's news, I want to say thank you on behalf of Starbucks for the work you have done. We're committed to supporting you through this transition," Grams said.
Store closures under 'Back to Starbucks'
The closures are part of the company's "Back to Starbucks" strategy, which was introduced in 2024 to revitalise the coffeehouse chain. Its milestones have included expanding staffing in thousands of coffeehouses, enhancing workers' benefits, and creating more opportunities for employees.
Grams, citing the most recent earnings calls, also noted that the strategy is "working" amid strong growth in Starbucks' North America business.
"This progress has given us a clearer view of the performance of every coffeehouse. While most are benefiting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you," he said.
Despite the closures, Grams said the organisation remains excited about the significant long-term growth opportunity in North America.
"We are actively developing a strong pipeline of new coffeehouses and remain committed to growth in North America," he said.
This is the latest round of closures of coffeehouses under chief executive officer Brian Niccol, who stepped into the role in September 2024. Starbucks also previously shuttered about one per cent of its coffeehouses in North America in fiscal year 2025 as part of a $1-billion restructuring plan.
