Starbucks to close 150 locations in 2019

20 June, 2018, 20:03 | Author: Miranda Cannon
  • The company closed over 8,000 stores in the United States for the afternoon to conduct racial-bias training for its employees following an incident invo

Starbucks will close 150 poorly performing company-operated stores next year, about three times as many as it typically closes. Management also plans to reduce the number of new licensed stores in 2019 by about 100 stores, according to CNBC.

The company told investors late Tuesday that it expects same-store sales to grow just 1 percent for the quarter that begins next month, lowering its previous guidance.

In May, Starbucks closed all of its more than 8,000 USA stores for an afternoon so that their employees could participate in "racial bias training" following an incident in Philadelphia in which a store employee called the police on two black men who were arrested for trespassing. In April, Schultz worked closely alongside Chief Executive Kevin Johnson to help limit damage to the company's image after a racial profiling incident involving the arrest of two black men in a Philadelphia store.


"While certain demand headwinds are transitory, and some of our cost increases are appropriate investments for the future, our recent performance does not reflect the potential of our exceptional brand and is not acceptable", Starbucks President and CEO Kevin Johnson said.

The company anticipates lower net new store growth in the United States for fiscal 2019 and said it would take steps to address rapidly changing consumer preferences by introducing new beverages, focusing on growing health and wellness trends. "It is not an excuse", for the 1 percent growth rate, he added. Starbucks closed its USA stores on May 29 to conduct racial-bias training for its employees.

"We have a line that we'd love to share with our customers later this year, so it is in our plans", she said. It also said that it would return about $25 billion in cash to shareholders through buyback programs as well as dividend offerings - which was about a $10 billion increase from the previously announced target.

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