Key Takeaways
- The coffee giant plans to shutter approximately 250 underperforming locations across North America, representing roughly 1% of its regional footprint.
- These shutdowns will result in restructuring expenses of about $300 million and affect approximately 900 employees.
- Shares of SBUX declined approximately 1% after the announcement.
- The move represents the second phase of restructuring initiatives under CEO Brian Niccol’s “Back to Starbucks” transformation strategy, following last year’s $1 billion overhaul.
- The company has revised its fiscal 2026 global net store opening forecast downward to approximately 440, compared to the previous projection of 600 to 650.
Shares of Starbucks experienced a modest decline of roughly 1% following the company’s announcement to close approximately 250 locations throughout North America. The decision was revealed through a regulatory submission filed on Thursday.
Starbucks $SBUX plans to close 250 underperforming North American stores and take about $300M in restructuring charges. Most closures are expected by the end of FY26.
ā Wall St Engine (@wallstengine) September 24, 2026
These targeted closures represent approximately 1% of the company’s extensive network of around 18,000 North American storefronts. The majority of these shutdowns are anticipated to be completed before fiscal year 2026 concludes.
The coffee retailer anticipates incurring approximately $300 million in restructuring expenses related to this closure initiative. Chief Operating Officer Mike Grams communicated to staff members that certain locations “continue to underperform despite the hard work and commitment” demonstrated by their teams.
Approximately 900 positions will be impacted by these location closures. The company has stated its intention to relocate baristas from closing stores to alternative locations whenever feasible, while providing severance packages to employees who cannot be transferred.
Additional phase of corporate downsizing
This announcement marks Niccol’s second major cost-cutting initiative. The Starbucks board of directors greenlit a comprehensive restructuring initiative in September 2025 encompassing store shutdowns and organizational realignment of its support infrastructure.
That initial restructuring program carried an estimated price tag of approximately $1 billion. Nearly 90% of these expenses were attributed to North American operations, distributed among employee severance payments, asset impairment charges, and early lease termination obligations.
By late June, the company maintained 11,149 company-owned and operated locations throughout North America. This figure reflects a reduction of approximately 300 stores compared to the corresponding period in the previous year.
Beyond retail locations, Niccol has implemented substantial reductions in corporate personnel. The organization eliminated roughly 2,000 corporate positions last year while also removing hundreds of vacant positions from its headcount.
In August, the company terminated more than 200 corporate employees, including personnel in store design, development and technology departments who refused relocation to the company’s newly established Nashville headquarters. An additional 300 U.S. corporate positions were eliminated earlier this year following the closure of regional offices in Chicago, Atlanta, Dallas and Burbank, California.
Strategic transformation driving the reductions
Niccol has established an objective to reduce operational costs by $2 billion before the conclusion of fiscal 2028. After assuming the CEO position in September 2024, he has prioritized reducing customer wait times, streamlining menu offerings and enhancing operational efficiency.
The transformation initiative is beginning to demonstrate positive results in revenue performance. Through July, the company had posted four consecutive quarters of positive comparable sales growth.
Foot traffic has improved across all demographic segments, according to Niccol’s April statement. Menu innovations such as protein cold foam alongside an enhanced rewards program have contributed to strengthening sales performance.
The company’s signature latte beverages have demonstrated resilience despite broader consumer pullback in discretionary spending, particularly among budget-conscious customers facing elevated fuel and grocery expenses. Coffee consumption, evidence suggests, remains a consumer priority even during economic constraints.
For fiscal 2026, the company has adjusted its projection to approximately 440 global net new store openings across both company-operated and licensed locations. This represents a significant reduction from the previously announced target range of 600 to 650 new openings.
Management has indicated that future expansion efforts will predominantly focus on international markets. Additionally, the company is developing a more compact, streamlined store format for the U.S. market as part of this strategic realignment.
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