The coronavirus pandemic has impacted countless businesses—from your favorite clothing stores to beloved shopping-mall staples. And now your morning cup of coffee may be the next to go. It's one of the biggest brands in the country, but even Starbucks has felt the financial effects of COVID. As a response to the toll the virus has taken on the company's bottom line, Starbucks says it's closing 800 stores in the United States and Canada by this time next year. Read on for more details about Starbucks' plan for the future, and for more coffee chain closures, check out Dunkin' Donuts Is Planning to Close 800 Locations by the End of the Year.
Starbucks has added 200 more stores to the 600 it was already planning to close.
iStockIn June of this year, Starbucks announced that it would close 400 stores in the U.S. and 200 in Canada over the next 18 months. And on an Oct. 29 fourth-quarter earnings call, Starbucks president and chief executive officer Kevin Johnson said the company will shutter 200 additional storesin the next year (100 more in the U.S. and 100 more in Canada)—bringing the total number of closures to 800. And for more retail shutdowns, find out which Cult Favorite Store Is Closing All U.S. Locations.
And another 200 international Starbucks closures are to follow.
iStockDuring the same call, Patrick Grismer, Starbucks executive vice president and chief financial officer, said another 250 international locations would close over the next year, seemingly as a result of the company's eight-percent drop in global revenue from last year. And for more coffee-shop casualties, find out which Beloved Coffee Chain Just Announced It's Filed Bankruptcy.
Many of the closures may be centered around city-based Starbucks.
iStockAccording to the company, stores located in metropolitan areas took the biggest hit. Johnson said that U.S. sales were "solidly positive for [their] drive-through locations and suburban stores for the fourth quarter and the month of September, respectively." However, he also said this was offset by negative sales in metro-based locations.
"We are in the midst of accelerating the transformation of our dense metro business by closing lower performing stores while continuing to capture that traffic where customers need us to be, including existing drive-through stores," Johnson said during the call. And for another way metro areas are changing these days, find out which Major Cities Are Showing Signs of Another Lockdown.
Despite the closures, 120 new Starbucks stores have opened since the start of the pandemic.
iStockAccording to its fourth-quarter report, Starbucks opened 119 new stores from July to September, for a total of 287 new locations in the Americas during the 2020 fiscal year, which began Oct. 2019. And while new openings may seem like a good thing, in comparison, Starbucks opened up 607 new stores during the 2019 fiscal year. Still, the company is looking to up the ante by opening up 850 new stores in the next year, according to Grismer. And for more useful content delivered straight to your inbox, sign up for our daily newsletter.
And the company is aiming for 1,000 new international stores over the next year.
iStockThat's after you factor in the 250 international locations the company plans to shutdown.
"For international, we expect to open approximately 1,300 new stores in fiscal 2021 and close approximately 250 stores, yielding 1,050 net new stores next year," Grismer said. Most of these locations are planned for China, where 600 of the new stores will be located. And for more changes you should know about from major companies, find out why Walmart Just Pulled These Controversial Products From Their Shelves.
