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Sunday, May 10, 2026
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Starbucks Closes 250 Stores and Takes a $300 Million Hit — Turns Out Overpriced Coffee Needs Actual Customers

Two hundred and fifty Starbucks locations will go dark this week. Not next quarter. Not "under review." This week. COO Mike Grams sent employees a letter Wednesday evening — obtained by Fox Business — telling them the company "carefully reviewed our North America coffeehouse portfolio and identified locations where we do not believe we can consistently deliver the experience we want for customers and partners."

That's corporate for "nobody's coming in."

The closures represent about 1% of Starbucks' 18,000-plus North American locations, and the company expects to eat roughly $300 million in restructuring charges — $200 million in cash costs for breaking leases and paying severance, another $100 million in noncash asset write-downs. Stock dropped 1.2% on the news Thursday afternoon, which is Wall Street's way of shrugging because they saw it coming.

This is the second major round of store closures under CEO Brian Niccol, who came over from Chipotle in September 2024 to rescue a brand that had spent years forgetting it was supposed to sell coffee. Last year, Starbucks shuttered hundreds more North American locations and eliminated 900 administrative positions. Before that, 1,100 corporate jobs got the axe.

Grams told employees the targeted stores either faced "significant financial hardship" or had no "path to acceptable financial performance." He added that "closing any coffeehouse is a difficult decision, and we know today's news will be hard for the partners, customers and communities affected." The company says it will try to transfer displaced workers to other locations and offer severance to those who can't be placed.

Meanwhile, Starbucks slashed its fiscal 2026 projection for net new store openings from 600–650 down to 440 — a cut of up to 210 locations. The new stores will come from international markets, not North America. So the company is simultaneously closing domestic shops and pulling back on building new ones here. The growth engine has moved overseas.

Niccol's turnaround strategy carries the name "Back to Starbucks," which tells you everything about where they think they went wrong. The plan involves bringing back ceramic mugs, handwritten cup names, free refills, condiment bars, and — apparently revolutionary in 2026 — more seating. The menu is getting simplified. The complicated drinks nobody ordered are getting cut. The company is completing upgrades at 1,500 existing stores to make them feel like neighborhood coffeehouses again.

Workers United, the union representing more than 12,000 baristas across 700-plus Starbucks locations, called the closures a betrayal of company values. The same union whose organizing drives across hundreds of stores added labor costs that made marginal locations even harder to keep open. Grams didn't mention the union in his letter. He didn't need to.

The pattern here extends well past one coffee chain. Corporate America spent years prioritizing everything except the product — social messaging, activist branding, elaborate ESG commitments, and organizational bloat that required 1,100 corporate employees who apparently weren't essential after all. Niccol's entire tenure has been a slow, expensive admission that the business wandered away from what customers actually wanted: a decent cup of coffee, a place to sit, and a transaction that doesn't require a PhD in menu navigation.

Starbucks revised its new-store target down by 32%. It's absorbing $300 million in charges. It's closing stores "later this week" while calling the strategy "Back to Starbucks."

The destination was right there the whole time. It just cost a few billion dollars in market cap to remember the address.

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