Starbucks is making changes in its footprint strategy in North America. Under its ‘Back to Starbucks’ strategy, the brand plans to close hundreds of stores in metro areas. In a bid to step back from dense urban expansion, the brand plans to focus on fewer locations that deliver sustainable growth.
Starbucks Scales Back Urban Saturation Strategy
Starbucks will be shuttering underperforming locations in the US and slashing corporate roles as part of its ‘Back to Starbucks’ strategy, Chairman and CEO Brian Niccol said in a media statement.
He pointed out that a recent review of the coffeehouse portfolio showed locations that were unable to deliver the experience customers want or even achieve financial success.
The company also announced that it moved resources closer to store operations and will eliminate 900 non-retail roles. The changes are expected to strengthen in-store services, improve design, and aid long-term growth.
The company is working to transfer the affected employees to locations close by and offer severance support to those who were unable to be placed. Employees who faced role cuts shall also receive support, Niccol said. The company hopes to continue investing in its stores, consumer experiences, and partners in the next fiscal year.
Starbucks Closed 42 Locations in New York
The move also comes as Starbucks rethinks its long-standing approach of clustering stores in busy city centers. With rising costs, widespread remote work, and stiff competition, the coffeehouse brand is shuttering nearly 400 stores across North America, according to a report by ABC. It noted that the brand is closing down its urban locations due to competition from niche coffee shops and smaller chains.
Starbucks has closed 42 locations in New York, amounting to 12% of its total in the city, the report stated. The brand also shut down over 20 stores in Los Angeles this year, 15 in Chicago, six in Minneapolis, five in Baltimore, and dozens more in other cities, the American Bazaar reported.
Starbucks is reshaping its footprint as it shifts away from urban expansion toward fewer, better-performing stores.
