Why Starbucks is Closing Stores and Restructuring and What This Means for You

Why Does Starbucks Keep Closing Stores in North America?

Starbucks is closing stores because, in the U.S, it has had six quarters in a row of declining same store sales, and declining sales is a wake-up call for a once coffee reigning champ. As articulated by chief executive, Brian Niccol, the revenue under the store closing strategy is to ensure that the stores that ‘don’t pay the bills’, and mars the customer experience are removed.

In what seems to be a refresh strategy, Starbucks toning down on their aggressive over the market expansion and taking over the basic customer service of creating a comfortable environment, improving service, and cutting down on waiting times. This is a long awaited change, especially after periods where three Starbucks cafés would be operating at the same time on an overlapping block and the customer experience in one of them would be the last consideration.

No More Pick Up–Only Stores

Another one of Starbucks’ surprises is the announcement of Starbucks’ Pick Up–Only format being eliminated by 2026. These elegant stores were designed to handle mobile orders and were built without seating as Pick Up–Only stores. These ‘convenience future’ stores have now turned ‘too transactional’ as per Starbucks.

Starbucks executives said that the Pick Up stores have no sense of community at all. These stores did not serve warmth and connection but turned the store down to being a caffeine vending machine. Starbucks is converting some of the sites into classic Starbucks with seating and others will just go away.

Why Pick Up–Only Failed

• No space for customers to linger or connect.

• Workers felt disconnected and disheartened by brand's mission of community.

• Competitors such as Dunkin’ and other local cafes provided a more pleasing experience.

Where Are Starbucks Stores Closing

This is not a symbolic act. The closures are affecting the community as they are closing stores in the United States and other countries. Starbucks is closing some locations that are decades-old landmarks and others that are newer and never found their footing.

Noteworthy closures we have so far:

Capitol Hill Starbucks Reserve Roastery in Seattle and is also a Reserve flagship store close to headquarters Seattle, WA following closures in the area, San Francisco, CA has seen six closures in under a year, including a Downtown café that operated for 20 years, Albany, NY is first to close stores which includes one under a year old, Texas has confirmed at least 20 store closures, Massachusetts has confirmed multiple closures in Boston, Cambridge, Natick, Brookline, Hyde Park.

Outside North America, Starbucks is closing some of its stores in the U.K., Austria, and Switzerland.

Job Cuts and Store Closures

Accompanied with store closures, Starbucks has said it will also cut 900 non-retail roles which includes corporate and support staff, along with unfilled positions which Starbucks also plans to cut. Affected employees will have severance and offered reassignment to nearby stores. Starbucks has said reassignment, which has caused a stir with baristas and staff already exposed to the union battles and concerns over working conditions.

How Restructuring Will Impact Customers

For coffee lovers, the big question is: how will this impact their daily coffee run? While some favorite local stores may close, Starbucks remains confident that they are not diminishing their global prospective, but simply reallocating some of their coffee resources.

Niccol has said that Starbucks plans to:

• Uplift the design, seating, and ambiance of more than 1,000 cafés

• Continue to prioritize in-store warmth, but rapidly advance digital ordering systems.

• Reallocate capital to faster growing markets and neighborhoods.

To loyal Starbucks fans, this will make their coffee experience stronger, even with fewer stores to choose from.

A Strategy Shift: “Back to Starbucks”

Starbucks is labeling their reversal of strategy as “Back to Starbucks”. Once comfortable seating, large coffee culture, and personable ambiance have fallen by the wayside, the goal is to return to what Starbucks was known for.

Starbucks has accepted that overexpansion has caused the coffee culture to lose its identity, with too many stores competing for the same space, and leaving some stores under-populated. By consolidating and reinforcing their core coffee shops they will refresh their identity and gain over their competitors.

For a lot of customers, the emotional impact of seeing Starbucks stores closing across the country might be bittersweet. The brand that once told you “your third place” between home and work, is rethinking what that space looks like in a mobile-first, post-pandemic world.

There’s a chance that, if Starbucks does succeed, the few remaining cafés could begin to reclaim the company’s position as the ultimate coffeehouse experience. If that’s not the case, the competition will be more than ready to take in the disappointed regulars.