Starbucks Announces Closure of 900 US and UK Stores Amid Cost-Cutting Efforts
In a move aimed at reducing wait times and reviving sales, Starbucks has announced the closure of approximately 900 underperforming stores in the US and UK, resulting in around 900 job losses in the US. The decision, which comes as part of a broader cost-saving measure, is seen as a significant step by the coffee chain to address declining sales in its home market.
According to Starbucks' chief executive Brian Niccol, the closures are necessary to create an optimal customer experience and achieve financial performance in certain locations. "This is a more significant action that we understand will impact partners and customers," Niccol said in a statement. The company has been struggling with flagging sales, prompting it to announce menu simplification and job cuts in February.
The store closures are expected to have the greatest impact on North America, where most of the affected locations are situated. In the UK, Starbucks is also shutting some underperforming stores as part of its cost-cutting efforts. Despite this move, the company remains committed to expanding its presence in the UK market, with plans to open 80 new stores.
The decision to close underperforming stores follows a trend seen in other retail chains, which have been forced to adapt to changing consumer habits and increasing competition. According to industry analysts, the coffee shop market has become increasingly saturated, leading to declining sales for some of the largest players.
Starbucks' move is also seen as an attempt to revamp its operations and improve customer satisfaction. By closing underperforming stores, the company aims to reduce wait times and create a more efficient experience for customers. "We are taking this action to ensure that we are operating in locations where we can deliver the best possible experience for our customers," Niccol said.
The store closures are expected to have an immediate impact on employees, with around 900 jobs being lost in the US. However, Starbucks has stated that it will be offering support and resources to affected staff members during this transition period. The company has also emphasized its commitment to its remaining workforce, stating that it remains "on track" to open 80 new stores in the UK.
As part of its cost-cutting efforts, Starbucks is also simplifying its menu in the US, a move aimed at improving efficiency and reducing costs. This decision follows a similar announcement made by the company in February, which saw the closure of over 1,100 stores.
The store closures are set to take place over the coming months, with affected locations being notified as soon as possible. Starbucks has stated that it will be providing support and resources to customers and employees during this transition period.
In a statement, Starbucks emphasized its commitment to its customers and employees, stating: "We understand that this decision will impact our partners and customers, and we are committed to supporting them through this change."
This story was compiled from reports by BBC Business and BBC Business.
