STARBUCKS will axe 467 of its restaurants in a matter of days as part of the sweeping changes being made by its CEO Brian Niccol.
The chief introduced his “Back to Starbucks” plan in a bid to revive the coffeehouse chain, which includes scrapping the locations that don’t align with that vision.
Starbucks is closing hundreds of locations in the US in a few days[/caption]
The Starbucks locations that are closing this week account for roughly 1% of its total count across North America.
Starbucks is closing the restataurants over several states, with high concentrations along both the east and west coast.
Niccol said in a company statement that this raft of closures was a “more significant action” than typical ones.
He said: “During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed.
The outlet Investopedia compiled a full list of the 467 locations, which you can see by clicking the link.
Starbucks is planning to revamp 1,000 locations across the next year to meet Niccol’s desire to turn the chain into a “third place”.
This refers to a destination outside of work and the home where people can go to socialize.
Niccol has said how he wants to move away from a convenience-only format, and as a is zeroing in on improving the customer experience.
TECH FOCUS
As a part of this, Niccol announced that Starbucks will be converting some of its mobile-only locations.
A Starbucks spokesperson also confirmed to The US Sun in an email that some of these locations will be converted into traditional coffeehouses with seating.
Niccol has also announced a new queueing system that won’t leave customers waiitng more than four minutes for a drink.
Niccol also hinted at investments in artifical intelligence to help, in an inivtae he called “Green Apron Service”.
This will see the introduction of a new Smart Queue technology that will utilize an algorithm to cut down on customer waiting times.
JOB LOSS
All of these changes do come at the expense of jobs, however, and Starbucks is going through two rounds of steep job cuts.
Restaurant closures in 2025
Denny’s – Denny’s has confirmed that up to 150 locations are set to close in the US by the end of the year as many of them are no longer profitable.
Red Lobster – The chain has said that it plans to close over 100 stores across the country this year as new CEO Damola Adamolekun takes over.
TGI Friday’s – TGI Friday’s is still being forced to shutter locations thanks to a bankruptcy filing, including 30 in April alone.
Applebee’s – This chain is projecting a loss of 20 to 35 Applebee’s spots in 2025 but is teaming up with IHOP to introduce dual-branded locations with a curated menu of the two’s best items.
Noodles & Company – This emporium is set to close between 17 and 21 locations in 2025 following a difficult 2024.
In February, Starbucks confirmed that 1,100 employees would be laid off at the corportate level.
Then, Niccol confirmed recently that a further 900 non-retail members of staff would be let go, too.
The job cuts come as the company is trying to get rid of unecessary expedtiture.
HUNDREDS OF MILLIONS SPENT
Howver, the resturturing plan will cost the company roughly $1 billion according to a filing sent to the SEC.
Roughly $150 million of that will be going towards employee separation benefits.
The store closures will also cost Starbucks hundreds of millions of dollars in early lease termination fees and other expenses.
Starbucks will spend $400 million on disposing store assets from the closing restaurants, and $450 million to end its lease contracts early.
