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Starbucks to Close Stores in US and UK Amid Sales Slump

Starbucks to Close Stores in US and UK
Image Source: By Getty Images

Starbucks has announced plans to cut around 900 jobs in the US and close underperforming stores in both the US and UK as part of a sweeping cost-saving drive.

Most of the closures will be in North America, where sales have fallen for six straight quarters. Chief executive Brian Niccol said the overhaul aimed to speed up service, reduce customer wait times, and help revive growth in the company’s biggest market.

“This is a more significant action that we understand will impact partners and customers,” Niccol wrote in a message to staff, while stressing the chain remained committed to expansion in other areas.

Impact in the UK and Europe

Starbucks confirmed that some stores in the UK, Austria and Switzerland would close following a review of its portfolio. However, the chain insisted it was still “on track” to open 80 new UK stores and 150 across Europe, the Middle East and Africa this financial year.

The company said closures would target outlets that failed to provide the right environment for customers or could not reach financial viability.

Turnaround Efforts Under New Leadership

The move comes after Starbucks cut 1,100 jobs in February and streamlined its US menu. Since taking over last year, Niccol has pursued an ambitious turnaround plan that includes redesigning stores, revamping seating, and reinstating self-service condiment bars.

Niccol previously led Chipotle Mexican Grill, where he oversaw a near doubling of sales during his six-year tenure.

Despite these measures, analysts warn Starbucks faces tough competition from rival drive-through coffee shops and a “deteriorating perception” of its brand among US consumers. The company’s shares have dropped more than 8% this year.

Union Concerns

Starbucks is also battling an ongoing unionisation drive in the US. Workers United, which says it represents baristas at more than 600 stores, criticised the latest restructuring as another example of top-down decision-making.

“Yet again, we’re experiencing new policies and major decisions being made with zero barista input,” the union said, arguing that under-staffing and pressure on employees remain unaddressed.

It added the closures signalled that “things are only going backwards at Starbucks under Brian Niccol’s leadership”.

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