Store Closures And Restructuring
Starbucks plans to close 250 North American coffeehouses as part of a major restructuring effort.
Anonymous
Key Points
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The latest closures are part of CEO Brian Niccol’s broader $1 billion restructuring effort; he announced a similar number of closures about a year earlier, alongside corporate layoffs.
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Starbucks’ North American turnaround plan has also included café renovations, improved service and a simplified menu.
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The company cut its forecast for global openings this fiscal year to about 440, down from its earlier projection of 600 to 650.
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Despite the planned closures, Starbucks reported that U.S. same-store sales rose 6% in its most recent quarter.
Starbucks plans to close about 250 North American coffeehouses as part of CEO Brian Niccol's $1 billion restructuring push, according to Yahoo Finance. The closures represent roughly 1% of Starbucks' regional locations and will cost the company about $300 million. Ragan Communications reports that the affected stores failed to meet customer-experience or financial expectations.
Despite the planned shutdowns, Starbucks reported that U.S. same-store sales rose 6% in its most recent quarter, Yahoo Finance noted. The company says it remains committed to long-term growth, though it cut its forecast for global store openings this fiscal year to about 440, down from an earlier projection of 600 to 650.
Niccol's Second Major Closure Wave in One Year
This closure announcement mirrors a similar downsizing about a year earlier under Niccol's leadership. Ragan Communications reports that COO Mike Grams notified employees the closures are part of Starbucks' 'Back to Starbucks' strategy. The company eliminated corporate jobs alongside the earlier round of store closures.
Underperforming Locations in Multiple States
Al.com reports that at least five Alabama locations are closing, including Patch coverage of the 15th Street Starbucks in Tuscaloosa. Ragan Communications states that Starbucks COO Mike Grams said these stores simply did not meet the chain's standards for customer experience and financial returns.
How Starbucks Hopes to Win Back Customers
Starbucks' turnaround plan includes café renovations, faster service, and a simplified menu designed to improve the customer experience. The company is transferring some employees to other locations or offering severance packages. In Seattle, two Starbucks are closing, and local coffee shops and bakeries are already moving into at least six former Starbucks sites, signaling a shift back to independent operators.
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