Starbucks will close around 400 company-operated stores in the near future, according to an analysis of the company’s records and a Thursday statement by CEO Brian Niccol. Starbucks confirmed to Restaurant Dive that the closures would mostly occur in the next few days; the company’s fiscal year terminates at the end of September, according to previous annual reports.
Niccol said Starbucks would end the fiscal year with a net 1% decline in its North American company-operated store count, which stood at 11,161 at the start of the fiscal year, according to its FY2024 10-K. This means the company should end the year with roughly 11,050 company-operated stores. Over the first three quarters of the year, Starbucks opened a net 292 company stores in North America, hitting 11,453, per its most recent 10-Q.
Accounting for those openings, Starbucks will shut nearly 400 stores.
Niccol’s statement seems to confirm this figure — counting licensed stores, Starbucks will end fiscal 2025 with about 18,300 North American locations, compared to the 18,734 such stores it possessed at the end of Q3, according to its 10-Q.
The closures, Niccol said, will be accompanied by layoffs of roughly 900 non-retail workers and the elimination of many open roles. Impacted workers, Niccol said, will be notified on Friday. This round of job cuts comes about seven months after the brand laid off 1,100 corporate support center workers. The brand has also made its return-to-office policies more stringent.
According to an 8-K describing the closures and layoffs, Starbucks will incur about $1 billion in expenses related to the following charges: $150 million in severance benefits, $400 million from disposal of store assets, and $450 million in lease expenses from closures occurring before the end of a lease.
Niccol said that store-level workers impacted by the closures will be notified this week, and that the company is trying to shift as many of them as possible into nearby stores.
Starbucks Workers United, which represents workers at about 600 open stores, said in a statement emailed to Restaurant Dive, that it was sending a formal request for information about the closures to the company and that the decisions, thus far, had been made without input from baristas.
“We expect to engage in effects bargaining for every impacted union store, as we have done elsewhere, so workers can be placed in another Starbucks store according to their preferences,” the union said.
“Fixing what’s broken at Starbucks isn’t possible without centering the people who engage with the company’s customers day in and day out,” the union said. The union also criticized the scale of Niccol’s compensation, and the company’s spending on a conference for managers in June.
Starbucks said that union representation was not a factor in the decision to close stores.
The closures follow a strategic review of the brand’s North American portfolio, undertaken as part of the ongoing Back to Starbucks plan.
Niccol said Starbucks is shuttering stores “where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”
The closures, according to Niccol, are part of an effort to prioritize the brand’s turnaround. Starbucks is already in the process of renovating 1,000 stores to meet new design priorities. Niccol said the results of test remodels, and ongoing major investments in store-level labor, has resulted in “customers visiting more often, staying longer, and sharing positive feedback.”
Starbucks expects to return to net unit growth in fiscal 2026, but the cadence of the closures is not exactly clear, especially as the end of fiscal 2025 is rapidly approaching.
