Starbucks is shutting down several underperforming locations in North America, including in Canada, as part of a sweeping $1 billion restructuring plan aimed at turning around declining sales and restoring the brand’s appeal.
The closures come as part of CEO Brian Niccol’s strategy to streamline operations, improve in-store experiences, and reestablish Starbucks’ identity as a true coffeehouse destination.
What’s Driving the Closures?
Starbucks is closing stores in areas that aren’t generating financial returns or where the store design makes it difficult to provide the type of customer experience that the company wants to offer.
In Canada and the United States, that translates to a couple of hundred company-owned stores closed by the end of fiscal year 2025 — roughly 1% of its North American presence.
Starbucks is getting squeezed by customers tightening their purse strings and increased competition from boutique coffeehouses and lower-cost options. Few consumers are willing to pay premium prices for specialty beverages, and that’s taking a toll on store profitability, particularly in urban and high-cost markets.
Even though Starbucks maintains that union membership is not involved in its closure policies, some high-profile closures — including the unionized Seattle roastery — have drawn raised eyebrows. Relations between Starbucks and Workers United have intensified, particularly following walkouts and impasse contract negotiations. Critics accuse the company of disproportionately closing unionized stores, which the company denies.
