Starbucks Corporation (SBUX.US) closes 400 stores in the United States. Strategic focus return to profitability and customer experience.

Starbucks Corporation has announced that as part of a $1 billion restructuring plan, it will be closing 400 stores in major cities in the United States. The closures will mainly affect metropolitan areas such as New York, Los Angeles, Chicago, San Francisco, and Baltimore. The coffee giant has been facing profitability pressures and challenges in maintaining brand standards in these regions. This decision comes as Starbucks Corporation responds to changing consumer behavior, including the rise of remote work, increased competition, and inflationary pressures among other factors. Starbucks Corporation CEO Brian Niccol had previously introduced the "Return to Starbucks" strategy, aimed at repositioning the brand as a "third space" outside of home and office, focusing on enhancing customer experience and operational efficiency. The closures are part of a comprehensive evaluation of Starbucks Corporation's 18,000 stores in North America, targeting underperforming stores. The company also plans to shift focus to suburban areas with lower operating costs, and renovate over 1000 stores to align with its updated brand vision. Additionally, Starbucks Corporation plans to open new stores in some affected cities by 2026. In addition to store closures, Starbucks Corporation will also cut approximately 900 corporate employees. The company says it will try to place affected employees in nearby stores, and those unable to be placed will receive severance packages. This restructuring is Starbucks Corporation's response to six consecutive quarters of declining same-store sales in the U.S. market. Despite the challenges, the company remains committed to advancing its transformation plan, including modernizing store designs and enhancing customer interactions. The union organization "Starbucks Workers United" representing some employees expressed concerns about the lack of involvement of baristas in the decision-making process, and plans to advocate for placement options for affected employees. In this period of major adjustments, Starbucks Corporation aims to strike a balance between cost control, long-term brand strengthening, and customer loyalty enhancement to respond to the constantly changing market environment. Since the beginning of the year, Starbucks Corporation's stock price has fallen by over 4%.