Starbucks is closing 400 stores across the US and this is not a failure story, it is a setback.
For years, Starbuck followed one rule: be everywhere.
Two stores on the same street. One across another.
Saturation was the strategy and it worked for decades.
In 2019, Starbucks had 30.000+ outlets in 80+ countries.
Then the pandemic changed cosumer behaviour forever.
Office crowds vanished, remote work became permanent. Daily commuters dropped sharply.
Urban locations suddenly lost their biggest customer base.
At the same time, competione exploded.
-Local cafes became trendier.
-Chains of other companies grow faster.
-Bubble tea, Matcha & smoothie brands stole younger audience
Starbucks no longer owned the daily coffee habit.
That’s not all, costs kept rising.
Rent in cities skyrocket. Labour became expensive and margins thinned.
Running multiply stores within walking distance stopped making financial sense.
In 2024, Starbucks hired a new CEO. Brian Niccol, the man who revived Chipotle.
His diagnosis was clear:
-Too many stores.
-Too much complexity.
-Too little experience.
Strabucks reviewed over 18.000 stores across the US and Canada.
The result? Underperforming urban locations where shut down.
New York alone lost 42 stores. Many other cities followed.
This is part of a $1 billion plan calles “back to Starbucks”
Under the plan, Starbucks is focusing on fewer stores, simples menus, faster service, better barista taining, redesigned cafes and bringing back the place experience.
Starbucks cut 30% ot its menu.
Too many custom drinks slowed the service. Barista’s struggled. Customers waited longer.
Simplification meant faster orders, better consistency, and a smoother instore experience. 1000 stores are now getting redesigned.
-Couches are returning.
-Tables are back.
-Charging outlets are added.
Starbucks wants people to sit again, not jus grab and leave.
The brand is also shifting toward suburbs.
-Lower rents.
-Drive-throug demand.
-More repeat customers
Growth is moving anway from crowded city blocks to sustainable neighbourhood locations.
Starbucks is not falling, it is fixing itself.
Too many stores weakened the brand. Fewer better stores can rebuild it.
This is not the end. It is a smart reset!
What is your opion of this article let me know in the comments.
#koffie #coffee #hospitality
