In the message to employees Thursday, Niccol said the company had reviewed and identified stores where the company would be “unable to to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”
Starbucks executives had previously said that the company would be slowing new openings in favor of remodeling existing locations this year. The renovated cafes are meant to encourage customers to linger, taking the coffee chain back to its roots as a “third place” for consumers, outside of home and the office.
Following Thursday’s announcement, share of Starbucks were roughly flat in premarket trading. The stock has fallen more than 7% this year.
In addition to focusing on the customer experience, Niccol has enacted additional changes to operations including a return to four days in office, beginning next month.
Partners,
I’m grateful for the work everyone is doing to put world-class customer service at the center of everything we do and focus on creating an elevated Starbucks experience for every customer, every time.
While we’re making good progress, there is much more to do to build a better, stronger and more resilient Starbucks. As we approach the beginning of our new fiscal year, I’m sharing two decisions we’ve made in support of our Back to Starbucks plan. Both are grounded in putting our resources closest to the customer so we can create great coffeehouses, offer world-class customer service and grow the business.
Changes to some of our coffeehouses
First, I shared earlier this year that we were carefully reviewing our North America coffeehouse portfolio through the additional lens of our Back to Starbucks plan. Our goal is for every coffeehouse to deliver a warm and welcoming space with a great atmosphere and a seat for every occasion.
During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed.
Each year, we open and close coffeehouses for a variety of reasons, from financial performance to lease expirations. This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centers of the community, and closing any location is difficult.
To put it into context: Since we’ve already opened numerous coffeehouses over the past year, our overall company-operated count in North America will decline by about 1% in fiscal year 2025 after accounting for both openings and closures.
We will end the fiscal year with nearly 18,300 total Starbucks locations – company operated and licensed – across the U.S. and Canada. In fiscal year 2026, we’ll grow the number of coffeehouses we operate as we continue to invest in our business. Over the next 12 months, we also plan to uplift more than 1,000 locations to introduce greater texture, warmth and layered design.
Partners in coffeehouses scheduled to…
Read More: Starbucks to close stores, lay off workers in $1 billion restructuring
