Starbucks announced on Thursday that it will close an additional 250 cafes across North America as part of its latest effort to improve financial returns and address underperforming locations.
The US coffee chain said the closures are intended to remove weaker-performing stores from its portfolio as it seeks to improve results under Brian Niccol, who took over as chief executive in September 2024.
Mike Grams, Starbucks’ chief operating officer, said the company had conducted a detailed review of its North American store network.
“We carefully reviewed our coffeehouse portfolio in North America and identified locations where we do not believe we are able to consistently deliver the experience we aspire to for customers and partners, or where we do not see a path to acceptable financial performance,” Grams said.
According to Grams, the closures represent about 1 per cent of Starbucks’ approximately 18,000 cafes across North America.
Gaza War and Boycott Pressure Hit Sales
During the war on Gaza, Starbucks told investors that there had been a “significant impact on traffic and sales” in the Middle East as a result of Israel’s war on the Gaza Strip.
The company also said sales at international outlets that had been open for at least a year would not grow at the level previously expected.
The impact was also felt in the United States, where the chain faced a boycott, former chief executive Laxman Narasimhan told participants during a conference call following the company’s quarterly earnings, according to a Sky News report.
The latest closures announced on Thursday follow the shutdown of hundreds of cafes in North America a year earlier, when Niccol also announced the elimination of 900 administrative positions.
Starbucks Pushes to Revive Its Domestic Business
Niccol, who previously led the Chipotle fast-food chain, is attempting to strengthen Starbucks’ performance in its domestic market following a period of declining results.
He has promoted the company’s “Green Apron Service” initiative, under which baristas are expected to make an additional effort in their interactions with customers, whether through “a warm smile, remembering a customer’s name, or making their day a little better”, according to the company’s website.
Starbucks had previously planned to open between 600 and 650 cafes worldwide this year. However, in a financial filing submitted on Thursday, the company, which operates around 41,000 cafes globally, said it now expects to open approximately 440 stores in the 2026 financial year.
Starbucks shares fell 1.2 per cent during Thursday afternoon trading.
Starbucks Closures Mount as Boycott and Weak Sales Take Their Toll
Starbucks is closing another 250 cafes across North America after identifying locations it says can no longer deliver acceptable financial performance. The closures amount to about 1 per cent of its 18,000-store North American network and follow the shutdown of hundreds of cafes and the elimination of 900 administrative jobs a year earlier.
The company has also acknowledged that Israel’s war on Gaza had a “significant impact” on customer traffic and sales in the Middle East, while the boycott of Starbucks was also felt in the United States. With international sales growth falling short of previous expectations, Starbucks has scaled back its global expansion plans from 600 to 650 new cafes to around 440 stores in the 2026 financial year.
