Key Highlights The coffee giant plans to shutter approximately 250 poorly performing North American locations, representing roughly 1% of its regional footprint. The company anticipates appro
Shares of Starbucks declined approximately 1% following the company’s announcement to close around 250 locations throughout North America. The closure plan was revealed in a regulatory document filed Thursday.
Starbucks $SBUX plans to close 250 underperforming North American stores and take about $300M in restructuring charges. Most closures are expected by the end of FY26.
— Wall St Engine (@wallstengine) September 24, 2026
The locations slated for closure represent approximately 1% of the company’s nearly 18,000 North American footprint. The majority of these shutdowns are expected to be completed before the conclusion of fiscal year 2026.
The company projects approximately $300 million in restructuring expenses related to this closure initiative. Chief Operating Officer Mike Grams communicated to employees that certain locations “continue to underperform despite the hard work and commitment” demonstrated by staff members.
Approximately 900 employees will be impacted by these closures. The company stated it intends to relocate baristas from closing stores to other operating locations whenever feasible and provide separation packages to departing workers.
These closures mark the second phase of Niccol’s cost-reduction efforts. Starbucks‘ board of directors authorized a comprehensive restructuring initiative in September 2025 that encompassed location closures and organizational realignment of support functions.
That previous restructuring initiative carried an estimated aggregate cost of approximately $1 billion. Close to 90% of these expenses were attributed to the North American operations, divided among employee severance payments, asset impairments for store locations, and early lease termination obligations.
According to late June figures, the company operated 11,149 company-owned and operated locations throughout North America. This represents a decline of approximately 300 stores compared to the corresponding period in the prior year.
Beyond the retail locations, Niccol has also reduced the corporate workforce substantially. The organization eliminated approximately 2,000 corporate positions last year and removed hundreds of vacant positions beyond that figure.
In August, the company terminated more than 200 corporate employees, including personnel in store design, development and technology functions who chose not to relocate to the organization’s new Nashville facility. An additional 300 U.S. corporate positions were eliminated earlier this year when the company shuttered regional offices in Chicago, Atlanta, Dallas and Burbank, California.
Niccol has established an objective to reduce expenses by $2 billion before the conclusion of fiscal year 2028. He assumed the CEO position in September 2024 and has prioritized reduced service times, streamlined menu offerings and enhanced operational efficiency in food preparation areas.
The approach seems to be delivering positive outcomes in revenue performance. As of July, the company had delivered four consecutive quarters of positive comparable sales growth.
Store traffic has increased across all demographic income segments, Niccol noted in April. Recent product launches including protein cold foam and an enhanced rewards program have contributed to stronger sales performance as well.
The company’s latte sales have demonstrated greater resilience than anticipated considering the broader reduction in discretionary consumer spending, particularly among lower-income consumers facing elevated transportation and grocery expenses. Coffee remains among the final discretionary purchases consumers eliminate.
Moving forward, the company now anticipates approximately 440 global net new location openings for both company-operated and licensed establishments in fiscal 2026. This represents a substantial decrease from its previous projection of 600 to 650 new stores.
The organization has indicated that the majority of its future expansion will occur in international markets. Additionally, the company is developing a more compact, streamlined store format for the U.S. market as part of this strategic pivot.
The post Starbucks (SBUX) Stock Dips Following Announcement of 250 Store Closures and Workforce Reduction appeared first on Blockonomi.
