Starbucks plans to close 400 stores

Starbucks, the major coffee shop, plans to shut up to 400 stores in the next 18 months, with intentions to potentially open repositioned stores in various stores and in new formats.

Starbucks plans to accelerate the development of its takeout-only Starbucks Pickup stores in major cities across the U.S. as it responds to changing rapidly customer requirements and a real-estate market that is suddenly closer to companies willing to expand. In a letter to “all Starbucks stakeholders” on Wednesday, CEO Kevin Johnson described a vision in which major metro areas have a mix of traditional and Pickup stores, some within walking distance of one another. The idea is to give takeout customers more choices while reducing crowding inside its traditional coffee shops.

“Our vision is that each large city in the U.S. will ultimately have a mix of traditional Starbucks cafes and Starbucks Pickup locations,” Johnson said, Restaurant Business Online reported. “Starbucks Pickup stores will provide more points of presence to better serve ‘on-the-go’ customers.” Johnson said the company originally planned to develop this strategy over a three- to five-year timeframe, but “rapidly evolving customer preferences hasten the need for this concept.”

The company will retrofit and reposition many existing stores to expand its portfolio, and the company is assessing its portfolio to make decisions on renovations, relocations and closures. “To inform these decisions, we are evaluating trade-area shifts, lease expirations and changes in customer traffic patterns while also considering opportunities to enhance the customer experience and capitalize on future growth potential,” Johnson said.