(Sept 24): Starbucks Corp is closing 250 underperforming locations across North America to focus on stores with higher potential. 

The closures, which will happen this week, represent about 1% of the company’s 18,000-location footprint across the US and Canada. Starbucks has been pruning its portfolio as part of a broader push to bolster sales and profit, betting it can steer customers to locations that offer better service and stronger results. In the longer term, the company plans to resume expanding its footprint.

Starbucks “identified locations where we do not believe we can consistently deliver the experience we want for customers and partners or where we don’t see a path to acceptable financial performance”, chief operating officer Mike Grams said in a message to company employees.

The closures follow a separate round of closures announced last September, when Starbucks said it would shutter hundreds of North American stores as chief executive officer Brian Niccol moved to right-size the chain. The company targeted locations where it saw no path to profitability, while focusing on stores that aligned with Niccol’s push to make its cafes more inviting places to visit.

The company will incur US$300 million (RM1.22 billion) in restructuring charges from the latest store closures, according to a filing. Net openings for this fiscal year will be 440 locations, down from previous guidance of as many as 650.

Shares of Starbucks were little changed in pre-market trading on Thursday. The stock had gained about 12% this year through Wednesday, compared with a roughly 13% gain for the S&P 500.

Starbucks has emerged from a sales slump in recent quarters after focusing on store upgrades, improved customer service, more relevant marketing and a revamped menu — all part of Niccol’s turnaround plan. Growth at established locations surpassed expectations last quarter, and analysts polled by Bloomberg expect the momentum to continue.

“This progress has given us a clearer view of the performance of every coffeehouse,” Grams wrote. Still, “while most are benefitting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you”.

Starbucks will offer transfers to workers at closing stores where possible. Those who can’t be reassigned will receive severance, according to the message. 

The chain closed its latest fiscal year, ended Sept 28, 2025, with fewer stores in North America as it shuttered dozens of locations even as it opened hundreds of others. 

Starbucks has said that it’s planning to rebuild its US store pipeline, seeking to open about 400 net new company-operated locations in its 2028 fiscal year. That excludes stores operated by partners such as grocery stores and airports. In the long run, Starbucks has said it could add at least 5,000 stores in the US alone. 

“We are actively developing a strong pipeline of new coffeehouses and remain committed to growth in North America,” Grams wrote. 

Uploaded by Tham Yek Lee