Why is Starbucks closing 250 stores? Inside Brian Niccol’s turnaround strategy

Starbucks plans to shut 250 underperforming coffeehouses across North America. The company announced the closures in a regulatory filing on Thursday. The move is part of CEO Brian Niccol’s broader plan to turn around Starbucks and improve sales.

Starbucks CEO Brian Niccol leads turnaround as company plans to close 250 stores. (AP Photo/Lindsey Wasson, File) (AP Photo/Lindsey Wasson)Starbucks is targeting coffeehouses that are not performing well. The company wants to focus its resources on stores and locations that can contribute more strongly to its business. The latest closures represent about 1% of Starbucks’ roughly 18,000 stores in North America.

Starbucks expects to complete most of the 250 store closures by the end of fiscal year 2026. The company expects the shutdowns to result in around $300 million in restructuring charges. This means Starbucks will have to spend heavily in the short term to make changes it believes will improve the business over time.

The company had already closed several underperforming stores in North America about a year earlier. That restructuring also included the closure of Starbucks’ iconic Seattle roastery. The earlier restructuring was estimated to cost Starbucks around $1 billion, according to Reuters.

Starbucks now expects to open about 440 net new company-operated and licensed coffeehouses globally in fiscal 2026. Earlier, the company had targeted between 600 and 650 new stores. The lower target shows that Starbucks is focusing more on improving its existing business rather than rapidly expanding its store network.

Brian Niccol became Starbucks CEO after previously leading Chipotle Mexican Grill, according to Reuters. He completed two years as Starbucks CEO in September 2026. His strategy is known as “Back to Starbucks.” The plan is aimed at bringing customers back to Starbucks and improving the company's overall performance.

One major part of the strategy has been reducing customer wait times. Starbucks has also worked on making its US menus simpler. The idea is to make ordering and getting drinks easier for customers while improving the overall store experience, Reuters reported, citing Starbucks’ turnaround strategy.

The company is not relying only on closures to fix its business. Starbucks has also invested in store operations and kitchen operations. These changes are intended to improve how stores work and help serve customers more efficiently.

Starbucks has taken steps to reduce expenses outside its coffeehouses. It has cut several corporate positions and closed some regional offices. The cost-cutting effort is another part of Niccol’s attempt to improve the company's financial performance.

As of July 2026, Starbucks had reported four consecutive quarters of comparable-sales growth. Comparable sales are an important measure because they look at sales performance at existing stores rather than simply counting new locations. The improvement suggests Starbucks has started to see stronger demand from customers.

Niccol said in April that customer traffic had increased across all income groups. This is important because Starbucks has faced pressure from consumers becoming more careful about spending. The increase suggests the company is getting more customers back into its stores, as reported by Reuters.

Starbucks drinks are often considered discretionary purchases, meaning consumers can cut them when money is tight. However, its lattes and other drinks have continued to attract customers despite a broader slowdown in non-essential spending. The pressure has been particularly noticeable among lower-income US consumers as households deal with high food and fuel costs.

The new 250-store shutdown plan is expected to create about $300 million in restructuring charges. So while Starbucks is trying to improve its long-term business, the changes will hurt its finances in the short term. The company is effectively accepting restructuring costs in an effort to build a more efficient store network.

Lale Akoner, global market strategist at eToro, called the store closures a “sensible but costly” step in Starbucks’ turnaround. She warned that investor patience could weaken if sales and profit margins stop improving, as quoted by Reuters.

Brian Jacobsen, chief economic strategist at Annex Wealth Management, also said Niccol has already shown progress. He said the next major test is whether Starbucks can turn its sales momentum into stronger margins.

Starbucks is now trying to fix several parts of its business at the same time. It is closing stores that are underperforming, slowing new-store expansion, improving store and kitchen operations and cutting corporate costs. At the same time, Niccol is trying to bring customers back through shorter wait times and a simpler menu. The latest 250 closures are therefore not a standalone decision but another major step in the “Back to Starbucks” turnaround strategy.

The overall goal is to create a stronger and more efficient Starbucks business rather than simply having more stores. The company has already reported four quarters of comparable-sales growth, but it now needs to show that this sales improvement can translate into better profitability and margins. That is likely to be a key focus as Starbucks moves through fiscal 2026.

Durva More is a Senior Content Producer at Hindustan Times, where she covers finance, and global news. She brings experience across digital and television journalism, with a strong focus on breaking news, business reporting, and international affairs. Before joining Hindustan Times, Durva worked as an International News Writer at The Economic Times, covering a diverse range of subjects including global politics, business, sports, entertainment, and major world events. She also worked as a Business Reporter with NDTV Profit. A postgraduate diploma holder in Journalism from the Asian College of Journalism, Durva is passionate about field reporting and storytelling. She thrives on the adrenaline of chasing stories, speaking with people from different walks of life, and amplifying voices that deserve to be heard. Her reporting is driven by curiosity, accuracy, and a commitment to making complex subjects accessible to readers. When she is not chasing stories or covering breaking news, Durva enjoys reading books and painting. She loves exploring new ideas, meeting people, and learning about different perspectives. For her, both journalism and art are ways to understand the world and tell stories that matter.Read More