Starbucks announced Thursday it will close 250 stores across North America, representing just over 1% of its 18,000+ locations in the region. The closures are part of the company’s ongoing "Back to Starbucks" turnaround strategy, which aims to improve financial performance and customer experience.
The decision was outlined in a memo from Starbucks COO Mike Grams to employees, stating that the targeted locations either failed to deliver acceptable financial results or could not provide the desired customer and employee experience. Grams emphasized that the company is continuing to retrofit 1,500 stores as part of its broader efforts to enhance in-store interactions and ambiance.
Financial and operational details released by Starbucks indicate that the closures will incur approximately $300 million in restructuring charges, with $200 million covering lease exits and employee separation benefits. The remaining $100 million consists of non-cash charges related to asset disposal and impairment. Most closures are expected to occur before the end of the company’s fiscal year, which concludes later this month.
Starbucks also adjusted its fiscal 2026 net new store openings projection to 440 locations, down from its prior estimate of 600 to 650. The revised outlook reflects a shift in focus toward international markets for future growth, though the company stated it remains committed to long-term expansion in North America.
Employee impact and transitions
The company confirmed it will offer transfers to affected employees where possible and provide severance packages when no alternative positions are available. Starbucks has not specified how many of the closing stores are unionized, though over 700 U.S. locations have voted to unionize since late 2021. The company has not yet reached a labor agreement with the union representing these workers.
Broader context and strategy
The closures mark the second round of North American store reductions under CEO Brian Niccol, who has overseen a company-wide revamp focused on improving customer interactions and in-store experiences. Starbucks described the move as part of a portfolio review to ensure consistency in financial performance and customer satisfaction across its locations.
The company reiterated its belief in long-term growth opportunities in North America, noting an active pipeline of new store developments despite the current closures.