Starbucks Guts Los Angeles And New York’s ‘Third Place’—434 Stores Shut Down In $1 Billion Retreat
ZMG Breaking News
2026-01-23
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Starbucks is closing roughly 400 underperforming U.S. stores under a $1 billion restructuring to prioritize efficiency and profitability.
The pullback targets dense urban markets, with New York City losing 42 locations, while Starbucks pivots to suburban drive-through stores. CEO Brian Niccol’s restructuring plan highlights operational changes and a renewed “third place” in renovated cafés.
Urban rents and labor costs weighed on margins in 2025, as commuter traffic fell and competition intensified. The company reported Q4 2025 revenue up 5.5% year over year, with net income pressured by severance, lease exits, and write-downs, while labor unrest continued with the “Red Cup Rebellion” and leadership signaled an uneven recovery with more guidance in early 2026.
The pullback targets dense urban markets, with New York City losing 42 locations, while Starbucks pivots to suburban drive-through stores. CEO Brian Niccol’s restructuring plan highlights operational changes and a renewed “third place” in renovated cafés.
Urban rents and labor costs weighed on margins in 2025, as commuter traffic fell and competition intensified. The company reported Q4 2025 revenue up 5.5% year over year, with net income pressured by severance, lease exits, and write-downs, while labor unrest continued with the “Red Cup Rebellion” and leadership signaled an uneven recovery with more guidance in early 2026.
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