Starbucks to close 250 North American stores in $300 million restructuring round

Store closures and restructuring costs

Starbucks announced on 24 September 2026 that it will close 250 underperforming coffeehouses in North America by the end of the week. The reduction represents roughly 1% of the company's regional store network, which numbered 18,371 locations at the end of June 2026, including 16,933 stores in the United States alongside sites in Canada, Mexico, Costa Rica, and the Caribbean. In a regulatory filing with the US Securities and Exchange Commission, the coffee chain disclosed that the closures will incur $300 million in restructuring expenses in fiscal year 2026. Of that total, $200 million consists of cash expenditures for commercial lease terminations and severance payments, while $100 million covers non-cash impairments and the disposal of store assets.

Cash lease exit and severance costs200

Non-cash asset impairment and disposal100

Cash lease exit and severance costs

200 $M

Non-cash asset impairment and disposal

100 $M

Data from the article text

Operational rationale and employee response

Starbucks Chief Operating Officer Mike Grams detailed the decision in an internal message to staff, explaining that the selected locations failed to meet financial benchmarks or provide adequate customer service. Grams noted that the company plans to transfer affected baristas and supervisors to nearby locations when feasible, with severance packages offered to those who cannot be reassigned. The store closures coincide with an extensive renovation push, with Starbucks aiming to complete physical retrofits at 1,500 North American stores by 30 September 2026 to create warmer cafe environments.

“While most are benefiting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you.”

The labor union Starbucks Workers United, which represents over 12,000 baristas across nearly 700 unionized locations in the United States, criticized the store closures and indicated it would file a formal information request with management.

Brian Niccol's two-year turnaround strategy

The planned shutdown represents the second wave of store closings under Chairman and Chief Executive Officer Brian Niccol, who marked two years leading the company in September 2026. In September 2025, Starbucks closed 627 locations across North America and Europe and eliminated 900 corporate positions, followed by an additional 300 corporate layoffs and regional office closures in May 2026. Niccol's "Back to Starbucks" plan has focused on simplifying menus, reducing customer wait times, and restoring amenities such as ceramic mugs, condiment bars, and handwritten cup labeling. The restructuring also follows the sale of a 60% stake in Starbucks' China retail operations to a private equity firm for $4 billion, part of a wider effort to achieve $2 billion in total cost savings by the end of fiscal year 2028.

Sales momentum and revised store opening targets

The restructuring occurs despite four consecutive quarters of comparable sales expansion following earlier revenue declines. In the quarter ending 28 June 2026, North American same-store sales grew 8.1% year-on-year, supported by menu additions like protein cold foam and resilient demand for seasonal drinks despite broader pressures on consumer spending. However, the closures prompted Starbucks to reduce its global net new store opening target for fiscal year 2026 to approximately 440 locations, down from an earlier projection of 600 to 650. Niccol stated that net new openings in the United States will remain flat through 2027 as capital spending prioritizes renovations over expansion across its worldwide base of 41,304 stores. Starbucks shares fell 0.52% on the New York Stock Exchange on Thursday following the announcement.