Starbucks to Close 250 North American Stores Amid Massive Overhaul

The “Back to Starbucks” overhaul isn’t over yet. 

Seattle-based coffee giant Starbucks announced  Thursday that it will close 250 stores across North America this week in its second round of mass closures since Brian Niccol took over as chairman and CEO in 2024. 

Mike Grams, Starbucks’ chief operating officer, said in a letter to employees that locations on the chopping block are underperforming financially or unable to deliver Starbucks’ desired experience for customers and employees, the Associated Press reported. The announcement did not specify which among North America’s roughly 18,300 Starbucks locations are due to close.

The last wave of closures came a little more than a year ago, when Starbucks cut 627 North American and European stores alongside 900 non-retail employees. This May, the company announced another 300 layoffs affecting its U.S. corporate employees and the closure of underused regional offices. The bold steps to rehabilitate the struggling brand were part of Niccol’s $1 billion restructuring plan, dubbed “Back to Starbucks.”  

The move came amid declining sales, increased competition and a rising tide of unionization by its retail employees. The workers union Starbucks Workers United formed in late 2021 and has spread to 700 U.S. stores. No labor agreement has been yet reached between the union and Starbucks.

Aside from store closures, the company-wide revamp has included thousands of store retrofits — 1,500 of which are due to be completed by Sept. 30, according to Grams. His letter on Thursday said that the company remains committed to growing its North American store count as well.

The progress gave the company “a clearer view” of how its coffeehouses were performing. 

“While most are benefiting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you,” Grams wrote in his letter.

Starbucks led New York City in chain store closures last year, when it shut down 42 Big Apple locations between late 2024 and late 2025. Retail analysts told Commercial Observer that the closures of popular urban locations could be traced to their small footprints, which make them difficult to upgrade, as well as post-pandemic declines in foot traffic, both of which set the urban coffeehouses apart from their drive-through counterparts. 

A leading broker at the Shopping Center Group declined to comment on the store closures, while Ripco Real Estate did not immediately respond to a request for comment. Both brokerages frequently represent Starbucks in New York City retail leases.

Emily Davis can be reached at edavis@commercialobserver.com.