5 questions about Starbucks’ store closures

1. What is Starbucks doing?

Starbucks plans to close 250 North American stores later this week. The company said the affected locations either aren’t delivering acceptable financial results or can’t provide the kind of experience Starbucks wants for customers and employees.

2. Why does this matter?

The closures are part of a broader turnaround effort under Chairman and CEO Brian Niccol, who has paired store cuts with an initiative to retrofit coffeehouses and make them “cozier and more inviting.” Starbucks Chief Operating Officer Mike Grams announced the closures in a letter to employees.

3. What happens to affected employees, and what about unionized stores?

Starbucks said it will transfer employees to other stores where possible or provide severance support if relocation isn’t an option. The company did not disclose how many of the affected stores are unionized; more than 700 U.S. Starbucks locations have voted to unionize since late 2021, and the company and union have not yet reached a labor agreement.

4. What’s the broader context?

The closures come as Starbucks continues retrofitting its North American coffeehouses to make them cozier and more inviting, with 1,500 stores expected to be retrofitted by Sept. 30, the end of the company’s fiscal year. Grams said this retrofitting process gave Starbucks clearer visibility into each store’s performance. Starbucks shares rose less than 1% in premarket trading Thursday following the announcement.

5. What comes next?

Grams said Starbucks is still committed to growing its store count in North America.

For more on this report, read “Starbucks to shutter 250 stores in North America this week in 2nd wave of closings” from The Associated Press, published on The Washington Times.