Starbucks to close 150 locations in 2019

Tanya Cunningham
June 21, 2018

In the past year, Starbucks has opened nearly 1,000 new stores in the Americas, which includes the U.S., Canada and Latin America.

The coffee behemoth is retrenching in its home market as it contends with sales growth that Chief Executive Officer Kevin Johnson acknowledges isn't fast enough.

Although business overseas has been booming and the chain has been opening more and more cafes, US sales growth has stalled for the company that brought espresso to the masses.

"Over the past year we have taken several actions to streamline the company, positioning us to increase our innovation agility as an organization and enhance focus on our core value drivers which serve as the foundation to re-accelerate growth and create long-term shareholder value", Johnson said.

In a statement, Starbucks CEO Kevin Johnson said that the company's recent growth-expected to hit just 1 percent in the quarter beginning next month-is "unacceptable" and the company will need to "move faster", in order to meet the needs of customers. Americans can "get that same flavor profile at a much lower price somewhere else".

Starbucks says it will speed up its store closings in the USA next year as it tries to boost sluggish sales. Outgoing chairman Howard Schultz said the training cost Starbucks "tens of millions" of dollars. It says it is going to concentrate on opening stores in markets that have fewer locations.

The report also indicates the 150 closures are about three times as many as the company usually closes. Its global comparable store sales increased 2 percent. The training also delayed the launch of Starbucks' spring and summer marketing campaign by about two weeks.

Starbucks Corp. (SBUX) plans to close 150 company-owned stores next year and put the brakes on the number of new licensed stores it opens. "But the current political environment with trade wars looming or the governments picking at each other-it definitely casts a shadow over the long-term prospects for large western brands that are in China".

Other reports by

Discuss This Article