Global coffee behemoth Starbucks has announced plans to downsize its North American footprint for the second time in two years.
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The coffee chain will shutter about 250 underperforming locations this week, Starbucks Chief Operating Officer Michael Grams said Thursday in an open letter to employees. That represents about 1% of its 18,000-plus North American locations.
“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,” Grams wrote.
Starbucks plans to net about 440 new locations this year, primarily in international markets, which is down from its previous outlook of 600 to 650, according to a Securities and Exchange Commission filing.
The company expects about $300M worth of restructuring charges tied to the closures, including roughly $200M for early lease exits and employee separation costs.
This is the second time the company has downsized its North American footprint during the tenure of CEO Brian Niccol, who took the helm in 2024. Starbucks announced plans to close more than 400 locations in September 2025.
Grams’ statement also highlighted the company’s plans to renovate 1,500 North American locations before the end of 2026.
Earlier this month, the chain shared that it had earmarked $1B for the effort, which will cover 9,000 stores in the coming years.
Starbucks will replace its typical interiors in these locations with leather armchairs, rugs and hardback books so they feel more like welcoming community spaces, the Financial Times reported. The costs will total about $150K per store.
The chain will avoid closures by making the changes overnight, Chief Financial Officer Catherine Smith said on the company's third-quarter earnings call in July.
That approach could differentiate Starbucks from its competitors like Dunkin' Donuts, Dutch Bros and 7 Brew that continue to focus their expansions on drive-thru locations.
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