Starbucks Is Closing 400 Stores—Here’s Where
There’s no denying that Starbucks has a thriving fan base that remains devoted to the company (and has even made some of its products go viral). But just like any other business, the ubiquitous coffee chain isn’t immune to retail hardships. As customer behaviors change, the company has been forced to adapt, which has included cutting back on locations. Now, Starbucks has come forward to explain its new strategy and its recent decision to close 400 stores across the U.S.
RELATED: Americans Are Abandoning Starbucks—Here’s Why, and What the Coffee Chain Is Changing.
Starbucks recently closed hundreds of stores.
Last September, Starbucks announced it would be shuttering about 400 of its cafes across the U.S. out of its existing 18,000, CNN reports. At the time, newly hired CEO Brian Niccol had said the move was part of a $1 billion restructuring plan the company was undertaking amid shrinking sales.
While a full official list of locations was never released, an unofficial Google Sheet with over 200 entries was made public and fueled by Reddit discourse, USA Today reported at the time. The current version of the sheet now lists over 500 potentially shuttering cafes.
In the months since, the company has acted relatively swiftly, focusing especially on shuttering locations in large cities. The chain axed 42 locations in New York City (or 12 percent of its total stores there), 20 in Los Angeles, 15 in Chicago, seven in San Francisco, six in Minneapolis, and five in Baltimore, among dozens of others, CNN reports.
“Starbucks regularly evaluates our portfolio of coffeehouses to make sure that we are meeting the needs of our customers,” the company said in an emailed statement to WSMV. “Opening and closing stores is a standard part of our business, and we don’t have additional news in the US or elsewhere to share.”
The company is facing several issues.
The moves come as Starbucks addresses several ongoing problems with its one successful model. Increased competition in its once very lucrative urban locales has been a major issue as smaller, more refined brands have begun to encroach on the territory, CNN reports.
The coffee chain has also struggled heavily in the wake of the COVID-19 pandemic, which shifted many on-site workers to remote schedules. The reduction in office foot traffic has hit the company’s bottom line hard, going so far as to include locations in once busy buildings as part of the latest closures, Catherine Yeh, the director of market analytics at CoStar Group, told CNN.
The company has also publicly spoken about its mounting issues with the mental health crisis currently affecting the U.S., as many use cafes simply as a public restroom. In recent years, the company has begun barring non-purchasing customers from using facilities.
RELATED: Customers Slam Starbucks’ Store Changes: “Just Fast Food, Zero Culture.”
The coffee chain plans to reinvest in other locations.
In light of the recent changes, the company isn’t going away completely. Rather, Niccol says the company will put money behind many of its existing locations, which include renovating 1,000 cafes in the U.S. The work will include installing new chairs, couches, lighting, and remote-work-friendly power outlets, per CNN.
Besides that, the company will also be focusing more on its drive-through outlets in the suburbs. According to analysts, this tactic will help Starbucks deal with decreasing rent, operating costs, and labor to help fuel a rebound, CNN reports.