Starbucks begins store shake-up
Coffee behemoth Starbucks, based in Seattle, is implementing significant changes across its chain of stores. The company announced that it would close underperforming stores in North America and cut nearly 900 corporate jobs. All the changes are part of its new “Back to Starbucks” strategy, aimed at winning back customers after six straight quarters of flagging sales.
While Starbucks hasn’t released an official closure list, employees have been taking to social media to provide details. Based on their reports, we know that around 20 Starbucks stores in Texas will be closing.
Which Texas stores are closing?
Store closures are happening in many Texas cities. Here’s what employees have reported so far:
- Houston: 7 stores
- Dallas: 3 stores
- San Antonio: 2 stores
- Fort Worth: 1 store
- College Station: 1 store
- Tyler, Lubbock, Katy, Freeport, Joliet, and Missouri City: 1 store each
Surprisingly, there are no Austin locations presently slated for closure. With more than 50 Starbucks stores in the Austin metro area, it looks like the company is holding on there.
Closures outside of Texas
Texas is not the only state with stores closing. Starbucks is closing a much larger number of stores elsewhere.
California: More than 150 stores will close, the hardest-hit state.
Other places where major cuts are happening are New York, Illinois, Massachusetts, Oregon, Washington state, and Washington, D.C.
In Canada, more than 50 stores will also close.
These moves reflect the company examining its overall North American presence, as opposed to specific cities or states.
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Why is Starbucks closing stores?
In a message to employees, CEO Brian Niccol addressed the reasoning. Starbucks wants to attract customers back to its original concept of a “third place” — a warm and inviting spot where people can relax, work, or meet with friends.
Niccol said that some stores no longer fit into that vision. “Yet, we’ve identified coffeehouses where we’re not able to create the type of physical environment that our customers and partners expect, or where we don’t see a clear path to financial performance, and these stores will close,” he said.
That is, if a store is not bringing in enough money or does not provide the customer experience it wants, Starbucks will close it.
What’s next for Starbucks?
Despite these closures, Starbucks nonetheless expects to end fiscal year 2025 with about 18,300 U.S. and Canadian stores. When balanced against new store openings, this will amount to only about a 1% decrease in overall stores.
The company is also redesigning its pickup-only stores. Earlier this summer, Starbucks announced that all pickup-only stores will be closed or converted into traditional cafes by 2026. There are more than 90 such stores in 20 states.
For example, in Austin’s West Campus, the pickup-only store near the University of Texas will be transformed into a café instead of shutting down completely.
The bigger picture
Starbucks is feeling the squeeze from smaller coffee competitors and changing consumer habits. Some now want to grab coffee quickly through drive-thrus and delivery services, while others require cosy spaces where they can sit and work.
The “Back to Starbucks” plan is an attempt to find a balance between these competing needs. By focusing on improved locations and closing weaker ones, the company aims to reclaim its identity and improve financial performance.
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What it means for customers
In case you are a Texas resident, you may want to check whether your area has been added to the list of closures. The hardest-hit cities are Houston, Dallas, and San Antonio, where a number of stores will be closed in each city.
However, with thousands of stores remaining, most Starbucks customers in Texas will continue to enjoy their daily caffeine fix.
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