Starbucks is closing about 250 underperforming coffeehouses across North America, even as sales at its remaining stores are showing signs of recovery.
The closures, approved as part of CEO Brian Niccol’s “Back to Starbucks” turnaround plan, will affect about 1% of the company’s more than 18,000 North American coffeehouses. Starbucks expects the move to create roughly $300 million in restructuring charges, with most closures completed by the end of fiscal 2026.
At first glance, the decision may look like a straightforward cost-cutting exercise. The numbers tell a more complicated story. Starbucks is reducing parts of its physical network while investing in stores that management believes can generate stronger sales, better customer experiences and healthier long-term returns.
Why is Starbucks Closing 250 Stores?
Starbucks says the affected locations do not deliver the coffeehouse experience and financial performance expected of the brand.
The closures are part of a broader review of its North American store portfolio under the “Back to Starbucks” strategy. Rather than treating every existing location as equally valuable, Starbucks is assessing whether individual stores have a viable path to better performance.
That means the latest announcement is less about abandoning physical stores and more about changing where Starbucks puts its money.
The company expects about $200 million of the $300 million restructuring charge to be cash costs, mainly related to lease exits and employee separation benefits. The remaining $100 million will be non-cash charges associated with store assets.
Starbucks’ Latest Store Decision at a Glance
|
Detail |
Latest information |
|
Stores closing |
About 250 |
|
Location |
North America |
|
Share of North American network |
About 1% |
|
Restructuring charges |
About $300 million |
|
Expected timing |
Majority by fiscal year-end 2026 |
|
FY2026 global net new stores |
About 440 |
|
Previous global guidance |
600–650 |
Why Close Stores When Starbucks Sales are Improving?
Starbucks’ latest quarterly results show that the company’s sales recovery is already underway. In the third quarter of fiscal 2026, North American comparable store sales increased 8.1%. Comparable transactions rose 4.5%, while the average ticket increased 3.5%. U.S. comparable sales rose 7.9%.
So the latest closures should not be read simply as evidence that Starbucks’ entire North American business is shrinking.
Instead, Starbucks is trying to improve the productivity of its store network.
The company ended the third quarter with 18,371 North American stores, down 2% from a year earlier. At the same time, North American revenue increased 7% to $7.4 billion.
That combination is revealing: fewer stores are generating higher overall revenue.
The 250 additional closures extend that strategy. Starbucks is effectively betting that a more focused store portfolio can perform better than maintaining locations that management considers structurally weak.
How Significant are the 250 Closures?
In percentage terms, the latest reduction is relatively small. About 250 closures represent roughly 1% of Starbucks’ North American store base.
The significance comes from the timing.
This is the second major round of North American store closures under Niccol’s turnaround. Starbucks already closed hundreds of locations in the previous restructuring, including its Seattle Reserve Roastery. That earlier restructuring was estimated to cost about $1 billion.
The latest announcement therefore shows that Starbucks is still actively reshaping its physical network rather than considering the earlier restructuring complete.
There is another important number: Starbucks now expects approximately 440 net new company-operated and licensed stores globally in fiscal 2026, down from its previous guidance of 600 to 650. Starbucks says the reduction reflects the 250 North American closures, partly offset by stronger net openings in international markets.
That makes the strategy clearer. Starbucks is not simply moving from expansion to contraction. It is closing some stores while continuing to add stores elsewhere.
What is Starbucks’ “Back to Starbucks” Strategy?
“Back to Starbucks” is Niccol’s effort to restore the company’s focus on coffeehouses, customer experience and operational execution.
The strategy has involved investments in stores, labor and service while Starbucks works to improve traffic and sales.
The latest results suggest those efforts are having an effect. Starbucks reported four consecutive quarters of comparable-store sales growth by the end of its third quarter. Globally, comparable sales increased 7.9% in Q3, while North America increased 8.1%.
But improving sales does not automatically mean every store is economically attractive.
A location can have customer traffic and still face high rent, weak margins, operational problems or a physical layout that Starbucks believes does not support its desired experience. Closing such a location allows the company to redirect resources toward stores with better prospects.
That is the logic behind the current round of closures.
What Happens to Starbucks’ Global Expansion?
The North American closures should not be confused with a global retreat.
Starbucks opened 175 net new stores during its fiscal third quarter and ended the quarter with 41,304 locations worldwide. Its international store count was 22,933, up 3% from a year earlier.
China is also undergoing a significant change in Starbucks’ operating model. The company completed a transaction in fiscal 2026 that shifted its China retail operations to a joint-venture structure, changing how those stores contribute to Starbucks’ reported revenue and store economics.
The result is a company pursuing different strategies in different markets: tighter portfolio management in North America alongside continued international growth.
What Does Starbucks’ Latest Closure Plan Mean?
The immediate effect will be felt by customers and employees at the affected locations, but Starbucks has not publicly released a complete list of all 250 stores.
For the business, the bigger issue is whether the remaining stores can produce stronger economics after the weakest locations are removed.
Starbucks’ latest results provide a useful starting point. North American comparable sales are growing, transactions are increasing and revenue is rising even as the store base has declined.
The new closures put that strategy to a bigger test.
Starbucks is no longer measuring its turnaround simply by how many stores it can open. The company is trying to determine which stores deserve further investment, which locations need changes and which ones no longer make economic sense.
That makes the 250 closures less a story about Starbucks getting smaller and more a story about Starbucks becoming more selective about where it operates.
