Starbucks to close some US and UK stores as part of a sweeping turnaround strategy led by its new chief executive, Brian Niccol. The move comes amid falling sales, ongoing labor disputes, and a challenging retail environment in the company’s biggest markets.
Niccol, who joined Starbucks last year after successfully leading Chipotle Mexican Grill, has been tasked with reviving customer confidence and modernizing the coffee chain’s operations. During his six year tenure at Chipotle, sales nearly doubled, and Starbucks is betting on similar results from his leadership. The company announced it will cut around 900 US jobs, mostly in support staff positions, and shut down underperforming outlets. While Starbucks to close some US and UK stores, it also confirmed expansion plans in other regions, with 80 new outlets set to open in the UK and 150 across Europe, the Middle East, and Africa (EMEA) this financial year.
Starbucks to Close Some US and UK Stores Amid Restructuring
According to Starbucks, the closures target locations unable to deliver the “physical environment our customers and partners expect” or those with no clear path to profitability. Most of the affected stores are located in North America, where the chain has seen six consecutive quarters of declining sales at existing outlets.The closures come at a time when Starbucks faces mounting pressure from Workers United, a union representing employees at more than 600 company-owned US stores. The union has criticized the company’s restructuring efforts, saying they highlight a lack of barista input and contribute to worsening working conditions.
Workers United accused Starbucks of ignoring frontline staff concerns about understaffing, heavy workloads, and job security. In response to the closures, the union said in a statement: Things are only going backwards at Starbucks under Brian Niccol’s leadership. Since taking over, Niccol has introduced several changes designed to lure back customers. These include remodeling stores with upgraded seating, bringing back self-service condiment bars, and streamlining operations to reduce wait times. Earlier this year, Starbucks also simplified its US menu and announced 1,100 job cuts to improve efficiency.
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Despite the turbulence, Niccol insists the closures are part of a broader plan to strengthen Starbucks in the long term. “This is a more significant action that we understand will impact partners and customers,” he wrote in a letter to employees, while stressing the company remains committed to growth in other markets. Although Starbucks to close some US and UK stores, the chain is simultaneously pursuing aggressive expansion in Europe and other regions. Analysts say this dual approach highlights the company’s strategy of pruning underperforming outlets while investing in high-growth markets. Starbucks shares have fallen more than 8% this year, reflecting investor concerns about declining sales in the US, its most important market. However, leadership hopes the restructuring will reduce costs, improve customer experiences, and ultimately restore momentum.
For now, the closures mark a difficult but necessary step in Starbucks’ efforts to reinvent itself under Niccol’s direction, signaling both the challenges and opportunities facing one of the world’s most recognizable coffee brands.
