Why Starbucks is closing 250 stores despite plans for growth
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Starbucks is closing about 250 coffeehouses across North America as it focuses more closely on store performance and the customer experience.
The closures represent about 1% of the company’s network of more than 18,000 North American coffeehouses. Starbucks said the affected locations either cannot consistently provide the experience it wants for customers and employees or do not have a clear path to acceptable financial performance.
The decision comes with a sizable cost. Starbucks expects about $300 million in restructuring charges. Around $200 million will be cash costs, mainly tied to lease exits and employee separation benefits. The remaining $100 million will consist of noncash charges related to asset disposals and impairments.
The closures will also slow Starbucks’ global store expansion this year. The company now expects about 440 net new company-operated and licensed coffeehouses in fiscal 2026. Its previous forecast called for 600 to 650.
The figures point to a change in how Starbucks is managing its physical network. The company still plans to grow, but it is giving more weight to the performance and role of each location.
Starbucks is spending now to improve the economics of its store network
Closing stores can be a defensive response to weaker demand or rising costs. In this case, Starbucks has placed the move within a wider review of where it should invest.
The company assessed its North American portfolio based on both the coffeehouse experience and financial performance. Most of the planned closures are expected to be completed by the end of fiscal 2026.
The latest action also follows an earlier round of restructuring.
In September 2025, Starbucks approved a plan that included closing coffeehouses that did not have a viable route to the physical environment the company wanted or a clear path to stronger financial performance. The company also restructured parts of its support organization as part of its Back to Starbucks program.
The latest closures suggest Starbucks is continuing to assess stores individually rather than using total store count as the main measure of progress.
That matters for any company operating a large retail or hospitality network.
New locations can increase revenue and extend market coverage. They also bring leases, labor costs, equipment expenses and maintenance obligations. A large network can become expensive if weak locations stay open because management is reluctant to reduce its overall footprint.
Starbucks appears willing to accept the near-term cost of closing locations where it sees limited prospects for improvement.
For other retail operators, the lesson is straightforward. Store count tells only part of the story. The economics, location and purpose of each site can matter as much as the total number of outlets.
The customer experience is shaping where Starbucks invests
The closures are taking place alongside investment in existing coffeehouses.
Starbucks said in September that it had redesigned more than 1,000 locations across the US and Canada since late 2025. It plans to complete at least 1,500 upgrades by the end of fiscal 2026 and increase the pace of work in fiscal 2027.
The changes include softer seating, new artwork, greenery and local design features. Starbucks has also brought back ceramic cups and glassware for customers staying in stores, restored condiment bars and expanded access to power outlets.
These investments show that the store review extends beyond cost reduction.
Starbucks wants its physical locations to play a larger role in the customer experience. A store that falls short of that standard can create two problems. It can generate weak financial returns while also making it harder for the company to provide a consistent experience across its network.
That gives management another factor to consider when deciding whether to renovate, relocate or close a location.
The issue is familiar to companies with large physical portfolios. Capital is limited. Money spent on a store with weak long-term prospects cannot be invested elsewhere in the network.
For Starbucks, closing some locations can free resources for stronger sites, new formats and better locations.
Fewer openings this year do not end Starbucks’ expansion plans
The clearest sign of the immediate effect is Starbucks’ revised store-opening forecast.
The company now expects about 440 net new company-operated and licensed coffeehouses globally in fiscal 2026. Its earlier forecast called for between 600 and 650.
Starbucks said the reduction mainly reflects the approximately 250 North American closures, partly offset by higher net openings in international markets. At the same time, the company said it continues to see significant long-term growth opportunities in North America and is developing a pipeline of new coffeehouses.
That combination matters for companies managing large property portfolios.
Growth does not require every existing location to remain open. A company can close weaker sites while investing in stronger locations and opening new stores where demand and economics are more favorable.
Starbucks’ current strategy puts that approach into practice at a large scale.
The company is accepting $300 million in restructuring charges and lowering its near-term expansion target. At the same time, it is investing in store upgrades and preparing for future openings.
For executives responsible for retail networks, facilities or capital planning, the more useful measure may be the quality of the portfolio rather than the number of locations alone.
Starbucks still intends to grow. Its latest moves show that growth will be more selective about which stores remain part of the network.
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