Starbucks Announces Major Store Closings Coming in 2019

  • Starbucks Announces Major Store Closings Coming in 2019

Starbucks Announces Major Store Closings Coming in 2019

The world's largest coffee chain is facing competition both from upscale coffee houses and lower-priced fast-food chains like McDonald's Corp and Dunkin' Donuts.

The company anticipates lower net new store growth in the United States for fiscal 2019 and said it would address rapidly changing consumer preferences by introducing new cold drinks like a mango dragon fruit beverage and focusing on growing health and wellness trends. In the past year, Starbucks has opened nearly 1,000 new stores in the Americas, which includes the U.S., Canada and Latin America. The stock slumped 3.5 percent in after-hours trading. That period has seen big strategic moves in China, a globe-spanning partnership with Nestle, a high-profile racially charged incident and unprecedented corporate response, and executive chairman Howard Schultz's quasi-retirement, effective next week.

"We have a line that we'd love to share with our customers later this year, so it is in our plans", she said.

Johnson indicated that the store closings would be mostly in major metro areas, where wage expectations and other regulations make it hard to operate at a greater profit.

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.

Starbucks also said it will shift new store openings to under penetrated markets and slow licensed store growth.

"Over the past year we have taken several actions to streamline the company, positioning us to increase our innovation agility as an organization and enhance focus on our core value drivers which serve as the foundation to re-accelerate growth and create long-term shareholder value", Johnson said. That alliance frees Starbucks to focus on improving its mainstay USA cafe business, where traffic growth had stalled.