Starbucks to Close Another 250 North America Stores

Starbucks will close approximately 250 North American stores later this week, the company announced, cutting roughly 1% of its more than 18,000 coffeehouses on the continent for the second time in about a year.

The Seattle-based chain said it reviewed its North American portfolio and identified locations where it cannot deliver the customer experience it wants, or where there is no path to acceptable financial performance.

Chief Operating Officer Mike Grams said in a statement on the company's website that the decision supports the coffee chain's "Back to Starbucks" strategy. Starbucks said it will support employees through the transition, offering transfer opportunities where possible. For any employees who cannot be transferred to other coffee shops, the company will provide severance support.

The second cull in a year

The move echoes a similar restructuring last September, when Starbucks cut 900 corporate roles and reduced its North American store footprint by about 1%, ending that fiscal year with around 18,300 locations. Starbucks Workers United reported at the time that 59 of the closed locations were unionized. Since 2021, nearly 700 U.S. Starbucks locations have voted to unionize.

The closures form part of CEO Brian Niccol's Back to Starbucks turnaround strategy. The former Chipotle CEO announced the plan on his second day in his new role at Starbucks in September 2024. Improving the customer experience and making cafes more welcoming were two primary goals in the plan. Over the last two years, the chain has redesigned 1,500 of its cafes to make them more inviting and simplified its menu to improve order-delivery speed.

Slower expansion, $300 million charge

Starbucks' news release did not identify which specific locations will close. Fast Company reached out to the company for additional details.

A regulatory filing shows the company now expects about 440 net new coffee shop openings globally this fiscal year, down from its earlier target of 600 to 650 openings.

"[Starbucks] continues to see significant longer-term growth opportunity ahead in North America and is actively developing a strong pipeline of new coffeehouses," the company said in the filing.

The chain expects most of the closures to be completed by the end of fiscal year 2026. It will incur approximately $300 million in restructuring charges, of which around $200 million relates to lease exit costs and employee separation benefits.

Shares of Starbucks Corporation (Nasdaq: SBUX) were basically flat when markets opened on Thursday. The stock is up roughly 12% year to date. The muted reaction suggests investors are treating the closures as a continuation of Niccol's existing turnaround rather than a new shock, with the trimmed opening target signaling that management is prioritizing store-level economics over footprint growth through fiscal 2026.