Starbucks to Close About 250 North American Cafes

SEATTLE: Starbucks said on Thursday, Sept. 24, that it will close about 250 underperforming cafes, roughly 1% of its more than 18,000 locations in North America, according to a Sept. 24 report by CNBC. It is the second round of North American closures during Chief Executive Brian Niccol's two-year tenure.

The company did not say where the closing stores are. Most will shut before the end of fiscal 2026, which ends later this month, according to a regulatory filing.

Grams Explains Which Cafes Made the List

Chief Operating Officer Mike Grams explained the choice in a letter to employees. "We have carefully reviewed our North America coffeehouse portfolio and identified locations where we do not believe we can consistently deliver the experience we want for customers and partners or where we don't see a path to acceptable financial performance," he wrote.

That wording matches Niccol's turnaround, which has focused on the in-store experience. TradeFlock has covered how Niccol says the next stage of the turnaround focuses on cafe makeovers and customer experience. Closing stores that cannot meet that standard is the other side of the same plan.

CNBC noted that Niccol's revamp of the U.S. business has centered on the customer experience, including in-person interactions at the counter. Grams' letter used the same framing, naming "customers and partners," the company's term for employees. Starbucks did not say how many employees work at the affected cafes or how many will be offered jobs at other locations.

Where the $300 Million Goes

Starbucks expects about $300 million in restructuring charges tied to the closures. About $200 million covers the cost of exiting leases early and paying separation benefits to employees. The remaining $100 million is a noncash charge for disposing of and writing down assets at company-owned stores.

Put another way, that is roughly $1.2 million per closed cafe, with about $800,000 of it tied to leases and severance.

Fewer New Stores in Fiscal 2026

The company also lowered its growth target. It now expects 440 net new cafes in fiscal 2026, down from its previous outlook of 600 to 650. All of those net new cafes will come from international markets.

That is a cut of 160 to 210 cafes from the earlier plan, or roughly a quarter to a third of the expected openings, with only days left in the fiscal year.

Starbucks said it still sees "significant longer-term growth opportunity ahead in North America" and is building a pipeline of new coffeehouses there. For fiscal 2026, though, all of the net growth is coming from outside North America.

Leases, Labor and Store Complexity

The charges point to where the costs of the turnaround sit: leases and labor. TradeFlock's analysis of the chain has argued that store complexity, not coffee, is the core problem, from product counts to labor hours and square footage. Cutting weak locations reduces fixed costs while the company works on the stores it keeps.

The wider restaurant industry is under similar pressure. McDonald's Chief Executive Chris Kempczinski has said he expects high inflation and flat traffic to persist, which leaves little room for underperforming units.

The next data point is Starbucks' fiscal fourth-quarter report, which will show how much of the $300 million lands in the quarter and whether same-store sales in North America are improving as the weakest locations close.