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Starbucks announced the impending closure of 250 of its stores in North America.
The locations, which represent roughly 1% of its 18,000-plus locations, are expected to shutter by the end of this week, the company said Thursday, per Reuters .
In a letter to employees, Starbucks Chief Operating Officer Mike Grams said that the locations that will be shut down are simply not delivering acceptable financial results or can’t provide the kind of experience that Starbucks wants for its customers and employees.
In 2024, Brian Niccol, the company’s new CEO at the time, introduced the strategy that aimed to introduce customer-favourite amenities, including free refills on drinks enjoyed in their shops, the return of the condiment bar, an improved code of conduct and a simplified menu.
In his letter, Grams said that while most locations are thriving as they integrate the strategy, some are underperforming, “despite the hard work and commitment of all of you.”
He added in the letter: “We’re making this decision for a simple reason: We want every Starbucks coffeehouse to be a place customers love and partners are proud to work.”
What locations are affected?
The company didn’t specify which coffeehouses will close or how many are located in Canada versus the U.S.
Starbucks also didn’t say how many — if any — of the closing locations are unionized.
Starbucks stores have voted to unionize since late 2021, but the company doesn’t support the unionization effort, and the union and the company have yet to reach a labour agreement.
When are the stores closing?
While Starbucks did not provide a specific closure date for the locations, Grams’ letter on Thursday stated “later this week.”
What will happen to the workers at the closing shops?
Grams said in his letter that employees will be offered opportunities to transfer to other locations.
Severance support would be provided for the workers unable to transfer, though the chain did not provide details on the severance package.
The Toronto Sun reached out to Starbucks to find out more on which Canadian locations would be impacted but a spokesperson could not provide an exact figure.
Same time last year
It was about a year ago that Starbucks made the same move to reduce 1% of its locations.
Starbucks had 18,371 North American locations last quarter, compared to 18,734 stores a year ago.
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Despite the closures, Grams said Thursday that Starbucks is still committed to growing its store count in North America, as the company continues to make its current coffeehouse roster cozier and more inviting.
The company expects 1,500 stores “uplifts” by Sept. 30, which marks the end of Starbucks’ fiscal year.
“This progress has given us a clearer view of the performance of every coffeehouse,” Grams added.
In May, Starbucks laid off 300 corporate employees in its regional support offices in the U.S. as it sought to return to “durable, profitable growth,” the company said at the time, per Reuters .
Starbucks said the moves were part of an ongoing effort to “sharpen focus, prioritize work, reduce complexity, and lower costs,” and would not impact its coffeehouses.