Starbucks will close 250 North American stores later this week under CEO Brian Niccol, cutting locations that fail on finances or customer experience.
Starbucks said Thursday it will shutter 250 coffeehouses across North America later this week, the second large wave of store closures since Brian Niccol took over as chairman and CEO in 2024.
The Associated Press reported the company did not name the stores, did not say how many sit in the United States, and did not say how many of the affected locations are unionized. Shares still rose less than 1% in Thursday premarket trading.
Chief Operating Officer Mike Grams told employees the cuts target coffeehouses that are not delivering acceptable financial results or cannot deliver the experience Starbucks wants for customers and workers. The message was blunt: most stores are riding the company’s momentum. Some are not.
In a letter to staff, Grams wrote that retrofit work has sharpened the company’s view of each location.
"This progress has given us a clearer view of the performance of every coffeehouse,"
He added:
"While most are benefiting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you."
Last September, Starbucks closed 627 stores in North America and Europe and laid off 900 non-retail employees. That was the first big round under Niccol. This week’s 250-store cut is the second.
In May, the company laid off another 300 corporate employees and closed some underused U.S. offices. The pattern is consistent. Locations and roles that do not pay their way are getting trimmed.
Starbucks is still renovating its North American fleet. It expects 1,500 stores retrofitted by Sept. 30, the end of its fiscal year. Grams said the company remains committed to growing its store count in North America even as weak sites come out of the system.
Workers at closing stores will be moved to other locations when possible. If the company cannot place them, it says it will provide severance support.
More than 700 U.S. Starbucks stores have voted to unionize since late 2021. The company does not support the unionization effort, and the two sides still have no labor agreement.
Starbucks would not say how many of the 250 closings involve unionized coffeehouses. That silence leaves workers, investors, and customers without a clear map of who gets hit. It also leaves a basic accountability question hanging: underperforming stores are being cut, but the public still cannot see the list.
For a chain that built its brand on ubiquity, the math is straightforward. A coffeehouse that keeps missing financial targets or cannot deliver a workable customer and employee experience does not stay open forever. Niccol’s tenure has already shown he is willing to shrink before he rebuilds.
Retail chains do not owe permanent life support to every weak location. Customers and shareholders get better service when companies close what fails and invest in what works.