Starbucks will close about 250 underperforming coffeehouses across North America as Chief Executive Officer Brian Niccol intensifies efforts to improve the company’s performance and reshape its store network.
The closures represent about 1% of Starbucks’ more than 18,000 North American coffeehouses and are expected to be completed mostly by the end of the company’s 2026 fiscal year. Starbucks expects the move to generate about $300 million in restructuring charges, including approximately $200 million in cash costs and $100 million in non-cash charges.
The company said the affected locations were identified after a review of its North American portfolio. Some stores have continued to underperform financially, while others have failed to deliver the customer and employee experience Starbucks expects from its coffeehouses.
The closures come about a year after Starbucks shut several underperforming locations as part of an earlier restructuring programme that was estimated to cost about $1 billion.
Niccol, who became Starbucks CEO in September 2024, has been pursuing a turnaround strategy known as “Back to Starbucks.” The plan focuses on improving service, simplifying menus, upgrading stores and strengthening the company’s core coffeehouse experience.
Starbucks said its North American business had returned to strong growth, with customers experiencing faster service and more consistent operations. The company is also accelerating its programme to upgrade 1,500 coffeehouses.
Despite the closures, Starbucks said it remained committed to expanding its North American footprint and was developing a pipeline of new locations.
The company has, however, reduced its forecast for global net new coffeehouse openings in fiscal 2026. It now expects about 440 new company-operated and licensed stores, down from its previous forecast of 600 to 650. The revision reflects the North American closures, partly offset by stronger openings in international markets.
Starbucks has reported four consecutive quarters of comparable sales growth through July, with customer traffic increasing across income groups.
The company said it would work directly with employees affected by the closures, offering transfers to other coffeehouses where possible. Workers who cannot be placed elsewhere will receive severance support.
Starbucks did not disclose how many of the 250 closures will be in the United States or Canada.
The latest reductions come as the company attempts to balance store expansion with profitability. While Starbucks continues to see long-term growth opportunities in North America, the latest portfolio review indicates that some existing locations are not generating the financial returns or customer experience required by the company.
The closures therefore form part of a broader effort to concentrate Starbucks’ resources on locations with stronger prospects while continuing to invest in its wider store network.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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