Starbucks Takes Step Back to Move Forward
Starbucks had previously announced it would slow the pace of new store openings in the U.S. and now the coffee giant has announced plans to shutter 600 underperforming stores this summer.
The store closings are expected to affect up to 12,000 employees or roughly seven percent of Starbucks’ workforce. The company said it would seek to place as many as possible in other locations. Starbucks plans to open fewer than 350 new units in the U.S. next year while the chain seeks to accelerate growth overseas.
Starbucks’ move is part of a plan to boost its bottom line and stock performance.
“In January, we committed to transforming the company through a series of critical and strategic initiatives to improve the current state of our U.S. business and build the business for the long term,” said Howard Schultz, chairman, president and chief executive officer of Starbucks, in a press release. “Our executive and field leadership teams conducted an extensive review of our U.S. company-operated store portfolio with a goal of enabling our organization to focus its efforts on locations where we can more effectively improve the customer experience.”
“Throughout the history of the company, we have always aspired to put our people first. This makes our decision to close stores difficult, because it is disrupting the lives of the people who have worked so hard to deliver superior service to our customers,” Mr. Schultz added.
Discussion Questions: Will Starbucks’ store closings along with the other moves the company has made this year reinvigorate the business or will it still be searching for answers in the year ahead?
- Starbucks closing 5 percent of U.S. stores – The Seattle Times
- Starbucks Increases Number of U.S. Company-Operated Store Closures as Part of Transformation Strategy – Starbucks Corporation
- A Message from Howard – U.S. Company-Operated Store Closures – Starbucks Corporation