Starbucks to Close 250 Stores This Week as Turnaround Effort Enters New Phase
Starbucks is closing approximately 250 coffeehouses across North America this week, marking another major step in the coffee giant’s ongoing effort to reshape its store network and improve the performance of individual locations.
The closures represent roughly 1% of Starbucks’ more than 18,000 North American coffeehouses. The company says the affected locations were identified after a detailed review of store performance and customer experience.
Why Is Starbucks Closing 250 Stores?
According to Starbucks Chief Operating Officer Mike Grams, the company identified stores that either were not delivering the customer and employee experience Starbucks expects or did not have a clear path toward acceptable financial performance.
The decision comes as Starbucks continues its broader “Back to Starbucks” strategy under CEO Brian Niccol, who took over leadership in 2024.
Starbucks says most of its North American stores are benefiting from improvements in service and the coffeehouse experience, but some locations continue to underperform despite efforts by employees and management.
The company has not publicly provided a complete list of the 250 locations being closed or disclosed exactly how many are located in the United States versus Canada.
This Is Starbucks’ Second Major Closure Wave
The latest closures are not an isolated event.
Last September, Starbucks closed about 627 stores across North America and Europe and eliminated approximately 900 non-retail positions as part of its restructuring efforts. The company is now undertaking another significant round of closures only a year later.
The difference this time is the stated focus on individual coffeehouse performance. Starbucks says its recent remodeling and operational work has given it a clearer picture of which locations are succeeding and which continue to struggle.
The company expects to have remodeled 1,500 coffeehouses by September 30, the end of its fiscal year.
Starbucks Is Still Planning to Grow
Closing stores does not mean Starbucks is abandoning expansion in North America.
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The company says it remains committed to long-term growth and is developing a pipeline of new coffeehouses. At the same time, it is removing locations that it believes are not meeting its financial or customer-experience standards.
The latest closures will, however, affect Starbucks’ near-term store-opening numbers. Starbucks now expects approximately 440 net new global company-operated and licensed locations for fiscal 2026, below its earlier expectation of 600 to 650.
That makes the strategy easier to understand: Starbucks is simultaneously shrinking parts of its existing network while investing in locations it believes have stronger potential.
What Happens to Starbucks Employees?
Store closures will also affect employees working at the locations being shut down.
Starbucks says it will attempt to transfer affected employees to other coffeehouses where possible. Workers who cannot be placed elsewhere will receive severance support, according to the company.
For workers and communities that have relied on a particular Starbucks location, however, the closure can still represent a significant change even if another store operates nearby.
The Closures Come With a Significant Cost
Starbucks expects the latest round of closures to result in approximately $300 million in charges.
About $200 million is expected to involve cash charges, primarily connected to lease-exit costs and employee separation benefits. Another $100 million is expected to be non-cash charges related to store assets and impairments.
That means Starbucks is accepting a substantial near-term financial cost in exchange for reducing exposure to locations it believes are not performing adequately.
What This Means for Starbucks
The 250 closures highlight the difficult balancing act facing Starbucks.
The company wants to improve profitability and the customer experience without giving up its long-term North American expansion plans. That means closing weaker locations, remodeling existing stores and continuing to develop new ones at the same time.
For customers, the immediate impact will depend on where the closures occur. Some communities may lose a nearby Starbucks, while other areas could eventually see investment in remodeled or newly developed stores.
For Starbucks, the bigger question is whether the combination of store closures, renovations and operational changes can produce a stronger store network over the longer term.
For now, the company is making clear that the strategy is not simply about having fewer stores. It is about having a portfolio of stores that Starbucks believes can deliver the experience and financial performance expected from the brand.
