Starbucks – once the unstoppable force planting green sirens on every city block – has quietly shuttered roughly 400 underperforming urban locations in 2025. CEO Brian Niccol, poached from Chipotle to stir the pot, decided that having stores practically waving at each other across the street was perhaps one mermaid too many.
The move hits hardest in dense metros where the chain’s aggressive expansion, once celebrated in Onion headlines and comedian riffs, now feels like yesterday’s overbrewed trend. New York saw 42 closures – a full 12% of its locations – enough to hand the Manhattan crown to arch-rival Dunkin’, per the Center for an Urban Future’s latest tally.
Customers loyal to their daily grande fix might notice fewer options on their commute. Baristas in surviving stores could breathe easier with less cannibalization from the shop next door.
Closing a lagging cafe often boosts traffic – and sales – at a nearby larger one, noted former real estate strategist Arthur Rubinfeld. Investors, however, remain jittery, with shares dipping around 6% this year as the turnaround simmers longer than expected.
Starbucks pioneered the idea that Americans would happily shell out premium prices for fancy coffee. Lattes went from novelty to norm, thanks to the chain’s relentless growth.
Yet that very success brewed fierce competition. Niche independents, smaller players like Gregory’s and Joe’s Coffee, plus a surge in smoothie and bubble tea spots chipped away at urban volumes.
Remote work delivered another jolt. Office districts, once buzzing with morning rushes, turned quieter post-pandemic, leaving ground-floor cafes in downtown towers eerily empty.
Some cities lost population temporarily, shrinking the customer pool further. Starbucks also grew tired of serving as unofficial public facilities amid rising safety concerns.
Former CEO Howard Schultz highlighted the strain in 2022, noting stores doubling as restrooms during a mental health crisis. This year, the chain ended its open-door bathroom policy, posting signs against panhandling and other behaviors.
Niccol’s “Back to Starbucks” plan aims to reclaim the cozy “third place” vibe. Over 1,000 stores will get remodels with more chairs, couches, and outlets to encourage lingering.
The company reviewed its 18,000-plus North American locations, closing those failing brand standards or profitability. A spokesperson confirmed plans for new openings and refreshes in 2026, complete with elevated designs.
Los Angeles lost over 20 spots. Chicago said goodbye to 15, San Francisco to seven, with more scattered across Minneapolis, Baltimore, and beyond.
Suburban drive-thrus beckon as the new growth frontier, where rents run lower and cars line up conveniently. Analysts see profit potential in spreading out rather than stacking up.
Serving grab-and-go mobile orders alongside sit-down sippers has created operational chaos. Streamlining that divide remains the biggest bean to grind.
Shares reflect the slow roast of recovery. Patience brews among stakeholders as Niccol balances heritage with hard realities.
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