Starbucks Will Close Roughly 400 Urban Stores, CEO Says

Starbucks is moving to scale back a decade long expansion in dense city centers, announcing plans to close roughly 400 underperforming stores across the United States and Canada as part of a $1 billion restructuring and repositioning program. CEO Brian Niccol, who joined Starbucks last year from Chipotle to lead a turnaround, said the review targeted locations that no longer met the company’s operational or brand benchmarks.

The company reviewed its portfolio of more than 18,000 stores in the United States and Canada to identify underperforming sites. Local and national reporting has compiled partial counts of affected markets, with 42 closures reported in New York City, a figure that represents about 12 percent of Starbucks locations there, more than 20 in Los Angeles, 15 in Chicago, seven in San Francisco, six in Minneapolis and five in Baltimore. Starbucks has not published a comprehensive, company verified list of all closures.

A Starbucks spokesperson told media outlets the company closed locations that were “underperforming or unable to meet our brand standards” and emphasized that “opening and closing stores is a standard part of our business.” Company materials and reporting link the decision to a set of structural pressures that have eroded volume at some city storefronts. Those pressures include a prior saturation strategy that placed stores in close proximity to one another, intensifying competition with smaller regional chains and specialty cafes, and a sustained decline in commuter foot traffic as remote and hybrid work patterns endure.

Analysts and local operators described the closures as both a reaction to external market shifts and a recalibration after the company normalized premium coffee through widespread presence in high density corridors. Competition from neighborhood chains such as Gregory’s and Joe’s Coffee was cited in coverage as drawing share in core metropolitan markets. Rising labor and real estate costs further compressed margins at lower volume locations, making smaller urban outlets especially vulnerable.

Niccol and Starbucks executives are framing the program as a strategic pivot. The company intends to invest in a leaner store footprint that emphasizes profitability and a revitalized in store experience, casting Starbucks more explicitly as a “third place” between home and work. Starbucks plans to open new stores and remodel existing ones in 2026, including in major metros such as New York City and Los Angeles, with a new store design intended to simplify operations and improve the customer experience.

The move carries broader market implications. Shrinking the number of storefronts will free up capital for experiential upgrades and may reduce short term pressure on same store sales, but it also risks displacing workers and eroding visibility in urban retail corridors where Starbucks once functioned as an anchor. Landlords and street level retail ecosystems will feel the impact in neighborhoods that lose multiple units. The company’s November sale of a controlling stake in its China operations to Boyu Capital adds another layer to the corporate reset, reallocating management attention and capital.

Reporting remains incomplete until Starbucks releases a formal list and timeline of closures, and the company’s next quarterly filings will be watched closely for detailed cost and headcount estimates. For now the plan marks a visible reversal of the growth through density strategy that defined Starbucks for decades, and highlights how post pandemic consumer patterns and cost pressures are reshaping national retail footprints.