Starbucks to Shut Underperforming Stores in US and UK as Part of Major Revamp

Starbucks is embarking on a sweeping overhaul of its business, announcing the closure of underperforming stores in the US and UK, alongside about 900 job cuts in its home market. The move, part of a broad cost-saving and turnaround strategy, is aimed at streamlining operations, cutting wait times, and reigniting flagging sales.

Most of the store closures will take place in North America, though select outlets in the UK, Switzerland, and Austria will also shut their doors following a full portfolio review. Despite these cutbacks, the coffee giant stressed it remains committed to expansion — with 80 new UK stores and 150 across Europe, the Middle East, and Africa (EMEA) still set to open this financial year.

“This is a more significant action that we understand will impact partners and customers,” said Chief Executive Brian Niccol, while underscoring that the restructuring is central to delivering the experience and performance Starbucks aspires to.

Trimming Jobs, Reshaping Stores

The job cuts in the US will primarily affect support staff, as Starbucks sharpens its focus on improving the customer experience. In a letter to employees, Niccol explained that the closures target stores that could not meet expectations for customer environment or financial performance.

The changes come just months after Starbucks cut 1,100 jobs and simplified its US menu in February, another step in its effort to reverse declining sales. The company recently reported its sixth straight quarter of falling US same-store sales, underlining the urgency of its restructuring.

Strategic Reset Under New Leadership

Niccol, who took over as CEO last year after a successful run at Chipotle Mexican Grill, is spearheading an ambitious reset. At Chipotle, he nearly doubled sales in six years — and Starbucks investors are looking for a similar revival.

His early initiatives include:

•Remodelling stores to refresh seating and layouts.

•Reintroducing self-service condiment bars.

•Streamlining store operations to reduce wait times.

Analysts at TD Cowen praised the “aggressive actions” but cautioned that Starbucks faces mounting headwinds, particularly from fast-growing drive-through coffee competitors and a weakening brand perception compared to rivals.

Labour Relations and Union Pushback

The company’s restructuring has drawn criticism from Workers United, the union representing baristas at more than 600 company-owned Starbucks locations. The union accused management of sidelining employee voices in major decisions and warned that under-staffing and workplace pressures remain unresolved.

“Yet again, we’re experiencing new policies and major decisions being made with zero barista input,” the union said in a statement, adding it would demand further details on the planned closures.

The Road Ahead

While Starbucks shares have fallen over 8% this year, the company insists its strategy will lay the foundation for long-term growth. For Niccol, the challenge is clear: win back dissatisfied customers, reassure employees, and restore the coffee chain’s reputation as the go-to café experience worldwide.