Starbucks said on Thursday that it will be closing 250 underperforming locations across North America.
COO Mike Grams told staff in a memo that a review of its operations found many stores that can’t consistently deliver adequate financial performance or customer experiences.
The closures represent just over 1% of Starbucks’ more than 18,000 North American locations.
The company said it will offer affected employees transfers wherever possible and severance when no other position is available.
The move comes as Starbucks pushes ahead with its “Back to Starbucks” turnaround strategy, including plans to complete 1,500 store upgrades to entice more customers back into stores.
Grams said the company’s North American business has returned to strong growth and that Starbucks remains committed to opening new coffeehouses across the region in the years ahead.
Read the full memo sent to employees below:
Partners, I want to share a decision we’ve made in support of our Back to Starbucks strategy. We have carefully reviewed our North America coffeehouse portfolio and 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. As a result, we will close approximately 250 coffeehouses later this week. This represents approximately 1% of our more than 18,000 North America coffeehouses. As we shared on our most recent earnings calls, our North America business has returned to strong growth. Customers are receiving faster service, a more consistent experience, and warmer, more welcoming coffeehouses. We’re accelerating our pace toward completing 1,500 coffeehouse uplifts, and Green Apron Service has become our defining standard. Our Back to Starbucks strategy is working. This progress has given us a clearer view of the performance of every coffeehouse. While most are benefiting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you. Every year we close some coffeehouses and open others as part of managing our portfolio. And as we shared previously, we remain excited about the significant long-term growth opportunity ahead in North America. We are actively developing a strong pipeline of new coffeehouses and remain committed to growth in North America. Closing any coffeehouse is a difficult decision, and we know today’s news will be hard for the partners, customers and communities affected. We’re speaking directly with impacted partners and will support them through this transition, including transfer opportunities wherever possible. For partners we are unable to place in another coffeehouse, we will provide severance support. To the partners in those coffeehouses impacted by today’s news, I want to say thank you on behalf of Starbucks for the work you have done. We’re committed to supporting you through this transition. We’ll also help customers continue their Starbucks routines and connections by directing them to nearby coffeehouses. 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. Thank you for everything you’re doing to help us get Back to Starbucks. Mike Grams
Chief Operating Officer
