It may be a little harder to find a nearby Starbucks in the coming weeks as the seemingly ubiquitous coffee chain is set to close hundreds of stores across the U.S., including an undisclosed number in the Chicago area.
Notice of the store closings, casualties of the company’s Back to Starbucks restructuring plan, began appearing this week, with signs posted in the windows of the shuttering locations.
“We’ve made the incredibly difficult decision to close this Starbucks location,” the sign on the Glencoe store has read since Thursday morning. “We know this may be hard to hear – because this isn’t just any store. It’s your coffeehouse.”
Similar epitaphs are popping up at locations across the city and suburbs. A Starbucks spokesperson did not provide a list of store closings, but said there would be signage up on each location and emails sent to notify customers.
The Back to Starbucks plan, which was announced by CEO Brian Niccol soon after he took the helm of the coffee giant in September 2024, was a mission to improve performance, quality and speed of food and drink delivery, while “elevating the in-store experience” to recapture the mojo of the 54-year-old chain.
Seattle-based Starbucks had 17,230 U.S. stores and more than 41,000 worldwide at the end of June, according to the company’s fiscal third quarter financial report.
The retail downsizing will likely reduce that total by hundreds, with the company estimating it will incur $1 billion in restructuring costs related to the store closings, most of which will be completed by the end of September.
The company is eliminating 900 corporate positions, while an undisclosed number of retail employees will be notified this week that their stores, and their jobs there, will be ending.
“We’re working hard to offer transfers to nearby locations where possible and will move quickly to help partners understand what opportunities might be available to them,” Niccol said in a letter to employees posted on the company’s website Thursday. “For those we can’t immediately place, we’re focused on partner care including comprehensive severance packages.”
North American same-store sales were down 2% in the third quarter, following a downward trend that saw a similar 2% decline in fiscal year 2024, according to financial filings.
From the outset of his Back to Starbucks plan, Niccol pointed a finger at underperforming stores in the U.S. that failed to deliver on the coffeehouse experience. In his letter Friday, he explained the decision to close an undisclosed number of locations.
“During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed,” Niccol said.
While Starbucks has yet to disclose the total number of closings or the specific locations, Niccol said in his open letter the company would end the fiscal year with nearly 18,300 stores in North America, which is down from 18,734 at the end of the third quarter, according to financial filings.
The company plans to renovate more than 1,000 of its stores in the coming fiscal year, Niccol said.
The decision to close stores has not landed well with Starbucks Workers United, which represents more than 12,000 baristas at 650 stores nationwide, including more than 30 locations in the Chicago area.
The union formed in 2021 and the first Chicago Starbucks stores joined in May 2022. But the national union has yet to ratify its first contract with Starbucks.
Workers rallied Thursday at the Starbuck’s store at Clark and Ridge in Chicago’s Edgewater neighborhood, one of the locations targeted for closure, according to the union. The store is set to work its coffee grinders and espresso machines for the last time Saturday.
“This announcement makes it clear things are only going Backwards at Starbucks under Brian Niccol’s leadership,” the union said in a message posted on its website Thursday.
On a crisp and sunny fall Saturday morning, a few customers filtered into the Glencoe Starbucks to get their last coffee at their local shop, and to say their goodbyes to the baristas. The store was set to close for good that evening. The store employees will find out Sunday if they’ve been transferred to another store or laid off, a barista said while whipping up a coffee.
Two sidewalk tables were occupied and a smattering of inside seats as well at the cozy Starbucks on Park Avenue. Meanwhile, across the street at Hometown, a North Shore coffee shop with three locations, all the outdoor tables were full and a line snaked out the door as families, dogs, bicyclists and other suburban early risers communed over lattes and bagel sandwiches.
After saying farewell to her longtime baristas, Jennifer Balestrery of Glencoe emerged from the more somber Starbucks Saturday morning with a coffee in each hand, and a heavy heart.
“I’m super disappointed,” Balestrery said. “I do love Hometown, don’t get me wrong, but there’s room in this town for both. So I’m just surprised. And it’s definitely a community, and you can see by the way we’re interacting with the staff, that it’s just sad.”
rchannick@chicagotribune.com