Starbucks to close 250 underperforming stores
Published in Business News
Starbucks announced Thursday that it plans to close around 250 underperforming cafes later this week as part of a turnaround effort.
The closures make up 1% of the Seattle-based coffee giant's North American stores and represent the second major round of closures under Starbucks CEO Brian Niccol, who joined the company in 2024. The company shuttered 627 stores last September.
Niccol has led Starbucks through a turnaround strategy he calls Back to Starbucks," which includes reviving the company’s traditional coffeehouse experience with upgraded shops and reduced wait times. It has also meant trimming the company's cafe portfolio and corporate staff, including those who refused offers to move to its new Nashville, Tenn., office.
In a letter addressed to employees Thursday, Starbucks Chief Operating Officer Mike Grams wrote that the store closures are part of that strategy.
He said the company "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."
Starbucks did not immediately respond to an inquiry about the exact store locations.
A Denny Triangle Starbucks located at 1700 Seventh Ave. near Pacific Place is reportedly closing Sunday, but Starbucks has not confirmed whether the location is part of the 250 store closures.
In the same letter, Gram said the company's Back to Starbucks strategy is working and noted that Starbucks' North American business segment "has returned to strong growth.
Starbucks struggled with weak sales and declining profits before ousting its former CEO after less than two years and replacing him with Niccol.
In January, Niccol promised to pursue steep cost savings, including $2 billion in cuts over the next two years.
“We’re going to be unrelenting” on cuts, Niccol told investors at the time.
Despite restructuring and store makeover costs, Starbucks has shown signs of recovery, with its fourth straight quarter of sales growth.
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