Starbucks Closing Stores Canada: Hundreds of Locations at Risk Amid Major Restructuring
Starbucks has announced significant changes to its North American operations, including Canada, as part of its “Back to Starbucks” turnaround plan. The move involves closing underperforming cafes, cutting jobs, and investing in store refurbishments. For Canadian coffee lovers and Starbucks partners, this marks one of the largest shakeups in years.
Starbucks Closing Stores Canada as Part of North American Strategy
The company revealed that a net reduction of about 1% in company-operated stores across the U.S. and Canada is expected by the end of its 2025 fiscal year. While Starbucks has not released a full list of Canadian stores affected, it confirmed that closures will impact both Canadian and U.S. markets.
The closures are part of a broader restructuring designed to improve store profitability and customer experience. Starbucks leadership explained that certain locations no longer met expectations, either due to financial performance or physical limitations of the store environment.
Starbucks Store Closures North America: The Bigger Picture
The Canadian closures are only one part of a sweeping plan across North America. Analysts project that as many as 500 stores could close in the fourth quarter of the fiscal year.
Key details include:
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Net closures: About 1% of total U.S. and Canadian stores
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Projected closures: Up to 500 cafes across North America
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Total restructuring cost: Estimated at $1 billion
| Area | Expected Impact |
|---|---|
| Canada | Dozens of stores included in closures |
| U.S. | Hundreds of stores, primarily underperforming locations |
| Financial | $1 billion restructuring cost with $150 million for severance |
This large-scale restructuring highlights Starbucks’ focus on resetting before pursuing new growth in 2026.
Starbucks Layoffs Canada and Beyond
Alongside store closures, Starbucks also announced the elimination of about 900 non-retail jobs. These cuts mainly affect corporate and support roles. In Canada, affected employees will be offered transfer opportunities to other stores when possible. If reassignment cannot be arranged, Starbucks will provide severance packages and extended benefits.
This decision adds to concerns for employees already facing uncertainty in the Canadian market. For Starbucks partners in Canada, the news reflects a challenging period of transition.
Starbucks “Back to Starbucks” Plan and Its Goals
CEO Brian Niccol described the closures and layoffs as part of the broader “Back to Starbucks” plan. This strategy is designed to address three main areas:
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Closing underperforming stores to free up resources.
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Investing in store refurbishments—with over 1,000 upgrades planned within 12 months.
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Improving customer experience with better-designed spaces and stronger service delivery.
Niccol emphasized that while the decisions were difficult, they would help Starbucks focus on long-term profitability and customer satisfaction.
Starbucks Restructuring 2025: Costs and Investments
The company expects the restructuring to cost around $1 billion. The largest expenses include:
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Lease exit costs for closed locations
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Asset write-downs
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Employee separation and severance packages (approximately $150 million)
At the same time, Starbucks plans to pour funds into modernizing its stores. Refurbished locations will prioritize ambiance, customer flow, and technology to deliver smoother service.
Starbucks Canada Coffeehouses Facing Market Challenges
The Canadian market presents unique hurdles for Starbucks. Competition from local and national players such as Tim Hortons, Second Cup, and McDonald’s McCafé has made growth more difficult. Starbucks Canada coffeehouses also face pressure from rising operational costs and changing consumer preferences.
Unionization has been another factor in recent years, particularly in provinces like Ontario and British Columbia. However, Starbucks has stated that union status was not considered when choosing which stores to close.
Starbucks Union Impact and Worker Reactions
Labor groups, including Starbucks Workers United, criticized the closures and layoffs. They argue that workers had little input into the decision-making process. In both Canada and the U.S., some union representatives worry that closures could weaken momentum in organizing efforts.
Despite this, Starbucks maintains that unionization was not a factor in store selection. The company insists that decisions were based solely on financial performance and operational challenges.
What Comes Next for Starbucks in Canada
Starbucks has signaled that this restructuring is a temporary pullback rather than a long-term retreat. After completing the “Back to Starbucks” reset, the company plans to resume expansion, potentially opening new and refurbished cafes across Canada.
For now, Canadian customers may see fewer locations in their neighborhoods, but Starbucks promises that the stores remaining—and those renovated—will provide a stronger overall experience.
The months ahead will reveal the full scope of Starbucks closing stores Canada, but one thing is clear: the coffee giant is reshaping its presence in the Canadian market to adapt to changing realities and prepare for its next phase of growth.
