Starbucks announces it's closing 150 stores in 2019

21 June, 2018, 00:31 | Author: Norman Carr
  • Starbucks Announces Major Store Closings Coming in 2019

Starbucks announced Tuesday that it is closing 150 of its USA stores in the next year, three times as many as the chain normally closes in that time period.

He also pointed to the impact of the company's response to the April arrest of two black men in a Philadelphia store, including the May 29 afternoon closure of 8,000 US stores for anti-racial bias training.

"Our growth has slowed a bit", said Starbucks CEO Kevin Johnson.

"It seems fairly clear that the low-hanging fruit on causing everybody to get addicted to their (Starbucks) fantastic products is kind of in the rear-view mirror", said Tony Scherrer, director of research at Smead Capital Management".


Starbucks Chief Financial Officer Scott Maw reportedly acknowledged that the incident "had an impact" on the low same-store sales growth rate of 1 percent expected for the quarter beginning next month.

Starbucks closed its USA stores on May 29 to conduct racial-bias training for its employees. Johnson said the chain will focus on less established suburban areas as well as improving its food offerings, which he says will include lunch salads and sandwiches.

The run of bad press has seemingly caught up with coffee giant Starbucks, as the company told investors late Tuesday that the company is preparing to close roughly 150 shops that have underperformed. There's going to be a new way for non-rewards customers to earn stars and rewards starting next spring, allowing visitors to cash in on loyalty without fully signing up.

Starbucks said it will return an additional $25 billion more to shareholders than initially planned in the form of share buybacks and dividends. New cafes will continue to open in markets that demand it, the company said, and it is "actively exploring strategic options to license company-operated stores in other appropriate markets". Additionally, it plans to cut general and administrative costs, and has hired a consultant to help in this area. Johnson confirmed Tuesday that China may one day be a larger market for Starbucks than the U.S.

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