Let this be the beginning of the end for Starbucks.
Patch reports that late Tuesday, June 19, 2018, Starbucks announced it plans to close 150 stores by the end of next year.
Starbucks has more than 28,000 stores in 77 markets. In 2017, there were 2,821 Starbucks locations just in California, according to Spoon University.
While the company has not yet said which locations will close, a notice to investors said the closures will affect “underperforming company-operated stores in its most densely penetrated markets” in urban areas.
The closure of 150 stores points to Starbucks not doing well:
- The anticipated 150 store closings is up from a historical average of 50 closings per year.
- Starbucks says it expects same-store sales to grow just 1% in the next quarter. Kevin Johnson, Starbucks’ new president and CEO, said in a statement: “Our recent performance does not reflect the potential of our exceptional brand and is not acceptable. We must move faster to address the more rapidly changing preferences and needs of our customers. Over the past year we have taken several actions to streamline the company, positioning us to increase our innovation agility as an organization and enhance focus on our core value drivers which serve as the foundation to re-accelerate growth and create long-term shareholder value.”
Starbucks temporarily closed 8,000 locations, including in California, the afternoon of May 29 to offer about 175,000 employees racial bias training after the arrest of two black men at a Philadelphia Starbucks who were unpaid customers and refused to leave.
Below is a graph showing Starbucks’ one-year stock performance and, beneath that, since 1990. Note that something happened in January 2018 which led to the company’s stocks plummeting.
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