Starbucks to Close ~250 North American Cafés This Week: WSJ

Starbucks is preparing to shut hundreds of underperforming cafés across North America this week, the latest cost move under CEO Brian Niccol, according to the Wall Street Journal.

The scope of the closures

Starbucks expects to shutter about 250 underperforming cafes out of its more than 18,000 locations in North America. That is roughly 1% of the North American footprint.

The company expects to incur about $300 million in restructuring charges related to the closures. The announcement marks the second round of closures in North America during Niccol’s two-year tenure.

Why now

Chief operating officer Mike Grams told employees the company identified locations where it does not believe it can consistently deliver the experience it wants for customers and partners, or where it does not see a path to acceptable financial performance.

Niccol has set a goal of cutting $2 billion in costs before the close of the company’s 2028 fiscal year, per the Wall Street Journal. The store cull fits directly into that margin push.

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Layoffs and labor tension

Starbucks confirmed that the company will be laying off around 900 non-retail employees. Baristas at affected stores will be offered transfers where possible, or severance.

Starbucks Workers United, which represents workers at the 700 company-owned U.S. Starbucks stores that have voted to unionize, said 20 unionized stores are among the 250 that are closing, or 8% of the total. Expect the union to push back on the mix.

Growth outlook cut

For fiscal 2026, Starbucks is now projecting net new openings of 440 cafes, down from its prior outlook of 600 to 650 locations. Those new cafes will come from its international markets.

The news followed a strong third quarter, indicating that Niccol’s turnaround plan was making progress. Starbucks posted same-store sales growth of 7.9%, more than the 5.7% growth Wall Street expected, according to Bloomberg data, and above the 6.2% jump seen in Q2.

Options market and stocks to watch

Watch SBUX for a reaction to the $300M charge hitting near-term earnings versus the longer-term margin story Niccol is selling. Implied vol into the next print is worth tracking given the guidance cut on new openings.

Watch MCD and QSR for read-across on North American traffic trends in the coffee and breakfast daypart. Also watch DNUT and BROS, which could pick up displaced Starbucks foot traffic in select markets. For more, check other news.

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