Starbucks will shut 250 underperforming North American coffeehouses later this week, the second major round of closings under CEO Brian Niccol as the chain trims weak locations and takes $300 million in restructuring charges.
The coffee giant plans to close the stores after a performance review found some locations still fall short on money and customer experience, even as the broader chain shows improvement.
The Associated Press reported Thursday that Starbucks did not name the coffeehouses or say how many sit in the United States versus the rest of North America. Workers at those sites will be transferred when possible or given severance.
Chief Operating Officer Mike Grams told employees the company now has a sharper read on every store. The closings mark another hard cut under Niccol, who joined as chairman and CEO in 2024 and has moved fast to shrink weak parts of the business.
Last September, Starbucks closed 627 stores across North America and Europe and laid off 900 nonretail workers. In May, it cut another 300 corporate jobs and shut some underused U.S. offices.
This week’s wave is smaller but follows the same pattern: drop locations that drain results, keep pushing a better experience, and keep expanding where the numbers work.
The New York Post reported the company will book $300 million in restructuring charges tied to the closings, $200 million in cash for lease exits and separation benefits, and $100 million in non-cash charges for disposing of and writing down coffeehouse assets.
At the end of June, Starbucks counted 18,371 stores in North America. The 250 closings amount to roughly 1% of that footprint.
Shares slipped less than 1% in Thursday afternoon trading after the news hit.
In a letter to employees, Grams tied the decision to clearer performance data after recent progress across the chain.
Grams wrote:
"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."
Targeted stores, he said, are not delivering acceptable financial results or cannot deliver the experience Starbucks wants for customers and employees. Just The News reported another line from the same letter:
"Closing any coffeehouse is a difficult decision, and we know today’s news will be hard for the partners, customers and communities affected."
That is the plain business case. Stores that keep missing the mark do not get a permanent pass. Customers and shareholders eventually pay for locations that cannot carry their weight.
Even as it closes doors, the company is remodeling others. Grams said Starbucks expects to finish retrofits at 1,500 North American coffeehouses by Sept. 30, the end of its fiscal year.
He also said the company remains committed to growing its store count in North America. The message is cut the weak units, upgrade the rest, and keep opening where demand and returns justify it.
Breitbart noted the same frame: underperformance and a weaker guest-and-worker experience drove the list, while leadership still points to expansion ahead.
That is how a large retail brand is supposed to act when parts of the map stop working. Sentiment does not cover rent, labor, and slow traffic forever.
Starbucks Workers United said 20 unionized stores are among the 250 set to close, about 8% of the total. The union represents workers at the 700 company-owned U.S. stores that have voted to organize since late 2021.
Workers United said Thursday it is sending Starbucks a formal request for information on the planned closings and will bargain at every unionized store affected. The union and the company still have not reached a labor agreement.
Starbucks did not publicly break out how many of the 250 sites are union shops beyond the union’s claim. The company also did not release a store-by-store list, so workers and communities will learn the details as notices go out later this week.
Whatever the final map, the core issue stays the same: locations that fail the financial and experience test are coming off the board.
Since Niccol took the top job, Starbucks has paired growth talk with repeated cleanup, hundreds of store closings last year, corporate layoffs in May, office consolidations, and now another 250 coffeehouses.
The company is telling employees most cafes are riding the recovery. A minority are not. Those are the ones leaving the network this week, with transfers or severance for the people who work there, and a nine-figure charge on the books to exit leases and write down assets.
Retail chains that refuse to face weak four-wall economics eventually drag down the strong ones. Starbucks is choosing the other path: measure every coffeehouse, close the ones that keep missing, refresh the ones worth keeping, and keep building where the model still works.
Markets still reward companies that cut what does not pay and protect what does, and customers notice the difference when a brand finally acts like it.