Starbucks Shutters Hundreds of US Locations in Major Reorganization Strategy

Starbucks is closing hundreds of stores across North America. The move is part of a major strategic shift. This decision was confirmed by the company on Thursday.

The closures follow six consecutive quarters of declining sales. CEO Brian Niccol outlined the plan to employees. He stated the goal is to refocus on the chain’s role as a welcoming “third place.”

Starbucks Store Closures Reshape National Footprint

The company’s “Back to Starbucks” plan will significantly alter its physical presence. According to reports from Business Insider, closures are widespread. States like California and the District of Columbia are seeing multiple locations shut down.

California is losing at least eleven stores. The District of Columbia will see nine stores close. Other states, including Maryland, Virginia, and Washington, are also affected. This represents a substantial reduction in the company’s overall footprint.

The company expects to end fiscal year 2025 with roughly 18,300 stores in the US and Canada. Newsweek reported this figure. New store openings will partially offset the closures, resulting in a net reduction of about one percent.

Strategic Shift Phases Out Underperforming Formats

CEO Brian Niccol explained the reasoning behind the closures. He said the company identified coffeehouses that could not meet customer expectations for the physical environment. Other locations were closed due to a lack of a path to financial performance.

This strategic move also targets the chain’s pickup-only store format. The company announced earlier this summer that all these locations will be closed or converted by the end of 2026. This includes over 90 stores across twenty states.

One example is the University of Texas West Campus pickup store in Austin. It will be converted into a full café. This shift underscores the renewed focus on the traditional, sit-down coffeehouse experience.

The planned Starbucks store closures mark a pivotal moment for the global coffee chain. This strategic consolidation aims to strengthen the brand’s core identity and financial health for the long term.

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Which states are most affected by the Starbucks closures?

California and the District of Columbia are seeing the highest number of closures. California has at least eleven stores closing, while Washington D.C. has nine locations shutting down.

What is the “Back to Starbucks” plan?

It is a strategic initiative to refocus on the in-store experience. The plan involves closing underperforming locations and phasing out the pickup-only store format to reinforce the brand’s “third place” ethos.

How many total stores will Starbucks have after the closures?

Starbucks anticipates having approximately 18,300 stores across the US and Canada by the end of fiscal year 2025. The net reduction after new openings is projected to be about one percent.

What will happen to Starbucks pickup-only stores?

All pickup-only stores are scheduled to be closed or converted into full cafés by the end of 2026. This change is a key part of the company’s broader strategy to enhance the customer environment.

Why is Starbucks closing so many stores now?

The closures come after six straight quarters of sales declines. The company stated it is shutting down locations that do not meet customer expectations for the environment or lack a path to strong financial performance.

Trusted Sources: Reuters, Business Insider, Newsweek