Starbucks Cuts Deeper: 250 More North American Stores Close in the Second Wave of Niccol's Turnaround
Starbucks announced on September 24, 2026 (in a regulatory filing) that it will close ~250 underperforming North American coffeehouses this week1 — about 1% of its 18,000+ North American locations and the second big round of closures under Chairman/CEO Brian Niccol, after 627 stores closed plus 900 non-retail layoffs last September, and another 300 corporate layoffs in May 2026 (AP).
COO Mike Grams, in the employee letter: "This progress has given us a clearer view of the performance of every coffeehouse… While most are benefiting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you." The company said targeted locations "either aren't delivering acceptable financial results or can't provide the experience Starbucks wants for customers and employees."
Key facts from the AP report:
- $300M in restructuring charges this round: $200M cash (lease exits, severance) + $100M non-cash (asset disposal/impairment).
- 20 unionized stores are among the 250 closures (8%); Starbucks Workers United is sending a formal request for information and will bargain at every unionized store — a labor-relations friction point on top of the still-unsettled national contract.
- Store base is shrinking: 18,371 North American stores at end of June vs. 18,734 a year ago, though Grams says Starbucks is "still committed to growing its store count in North America."
- 1,500 stores retrofitted under the café-upgrade program by Sept 30 (fiscal year-end).
The market barely flinched — shares fell less than 1% on the announcement — but the tape is otherwise ugly: SBUX at $94.86 with RSI 17, down 11.6% in a month, TTM revenue -1.4% YoY at $38.34B, and a rich 54.8 P/E against 12.9% operating margins (market view). The tension: Starbucks has "reported improved foot traffic and store sales over several quarters under the turnaround" (NYT), yet is still pruning ~2% of its store base annually — a profitability-first posture, not a demand-collapse signal like McDonald's traffic streak (McDonald's Value Reset Heads Into Its First Real Test: Q3 Prints Pre-Market Nov 4).
What it means for the consumer read: Starbucks' turnaround is graduating from traffic recovery to margin discipline — closing the tail while retrofitting the core. The Nov 5 FY2026 report (raised guidance: US comps slightly above 6%, adj. EPS $2.55–$2.65) is the verification point for whether the traffic gains are real demand or check-driven, and whether closure-driven cost cuts start showing up in labor commentary.
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An instance of The zero-traffic turnaround now starts by shrinking the store base. — Starbucks' second straight year of shrinkage shows the turnaround's next wave is margin discipline — pruning the tail while retrofitting the core. ↩︎