It appears we have reached a point in time where you might not see a Starbucks coffee shop on every corner you turn as you make your daily commute. The coffee chain, popular for its iced frappuccinos and pumpkin spiced lattes, amongst other coffees and beverages, has opened the new year with plans to close the doors of several of its stores. This scaling down of business comes as a result of emptier stores, as well as worker unrest.
The current state of Starbucks
ScrapeHero, a data services provider, has concluded that the coffee giant has 17,000 licensed and company-operated branches spanning across the United States. This data is accurate as of December 31, 2024.
As of late, Starbucks appears to be struggling both in terms of sales and worker relations. The COVID-19 pandemic and its subsequent lockdown has caused lingering effects on the company’s operations that persist to this day. The coffee chain also had to navigate worker strikes a few days before Christmas last year.
The chain’s employees made the decision to go on a five day strike that ended on Christmas Eve after progress was stalled with no attempts at resolution during contract negotiations. Starbucks Workers United is the union that backed this strike with workers in the key cities of Los Angeles, Chicago, and Seattle being the first to go on strike during what is possibly the busiest time of the year for the company.
Locations of the impending store closures
A blog dedicated to the coffee franchise called StarbucksEverywhere has shared a list of locations that are or will be closed as 2025 progresses.
The following locations will be closing their doors:
- 99 Jackson St, San Francisco, CA, set to close February 9
- 1799 Fulton St, San Francisco, CA, closed
- 2222 Fillmore St, San Francisco, CA, closed
- 166 7th Avenue, Brooklyn, NY, set to close January 30
- 1851 Bethlehem Pike, Flourtown, PA, closed
- 1201 Elm St, Dallas, TX, closed
- 1001 N Arney Rd, Woodburn, OR, closed
- 12000 Southeast 82nd Avenue Clackamas Town, Center, Happy Valley, OR, closed
- 10201 W 75th St, Overland Park, KS, closed
- 145 W. Santa Clara St., San Jose, CA, closed
- 751 N Milwaukee Ave, Wheeling, IL, closed
Company perspective and future plans
Growth does not appear to be in the books for the Starbucks this year. In addition to store closures, the company will also be scaling back on opening new stores for the year of 2025. In October, the CFO shared that this decision will aid and “accommodate a redesign, while also unlocking capital to support our broader turnaround.”
In a statement, Starbucks Chief Financial Officer Rachel Ruggeri shared regarding the closures: “Despite our heightened investments, we were unable to change the trajectory of our traffic decline, resulting in pressures in both our top-line and bottom-line. While our efficiency efforts continued to produce according to plan, they were not enough to outpace the impact of the decline in traffic.”
Additionally, Ruggeri also revealed that the company is “developing a plan to turn around our business, but it will take time. We want to amplify our confidence in the business, and provide some certainty as we drive our turnaround. For that reason, we have increased our dividend.”
“As part of Starbucks standard course of business, we continually evaluate our business to ensure a healthy store portfolio,” a Starbucks representative shared with Bay Area outlet SFGATE in the aftermath of the San Francisco store closures.
There is no doubt that the regularly rising inflation rates and increasingly difficult to maintain costs of living are at the root of the problem the coffee chain is having with customer traffic. The drinks served at Starbucks stores — particularly the specialty, limited edition drinks — are known to be a bit on the pricier side in terms of value for money. Perhaps consumers are simply choosing to make their daily coffees at home to maintain their budgets.