• Starbucks announced a USD 1B restructuring plan, including 400 store closures in North America and additional workforce reductions.
• The closures reflect shifting consumer habits, rising competition from smaller chains, and customer pushback on Starbucks’ rising prices.
• Despite the contraction, Starbucks will continue to open new stores, aiming for a leaner, more resilient global business strategy.

Starbucks

Starbucks, once seen as the café on every corner, is rethinking its structure. The company recently announced a USD 1 billion restructuring plan that includes closing several cafés in North America, along with layoffs. Furthermore, this restructuring includes the closure of nearly 400 stores. This comes as part of its transformation strategy under the slogan “Back to Starbucks,” led by CEO Brian Niccol.

CEO Brian Niccol said the decision came after reviewing the company’s network and finding stores that no longer met expectations. Some locations struggled to attract enough foot traffic, while others were not financially viable. The closures mark one of coffee chain’s’ most significant pullbacks in years.

Still, Starbucks is not retreating entirely. The company will continue to open new stores next year as part of a shift toward efficiency. Niccol stressed that the move aims to create a stronger and more resilient Starbucks.

Coffee Shops

Analysts point to changing consumer habits as a driving force. During the pandemic, many customers moved away from urban centers. This left the coffee chain with underperforming city stores that no longer justified their leases. It is also facing growing pressure from independent cafés and emerging chains. On top of that, many customers have expressed concerns over the company’s high pricing.

For the company, the road ahead looks challenging. Global economic uncertainty, combined with the rapid rise of agile competitors, means it cannot rely solely on brand power. Instead, it is betting on leaner operations and targeted expansion.

The closures may signal the end of Starbucks’ “every corner” era.