Why Starbucks Will Close 150 Stores Next Year

Why Starbucks Will Close 150 Stores Next Year

Why Starbucks Will Close 150 Stores Next Year

Here, Johnson says the company still has work to do to improve in-store efficiently and make the most out of its loyalty programs. By 2019, the company plans to cut that growth rate to 3 percent. The overall number of stores will continue to increase, but that growth will be focused.

As for store closures, Johnson said the ones it's targeting are unlikely to be moved or replaced, with their business ideally moving to other shops and raising overall system performance.

In early May, Swiss-based Nestle said it would pay Starbucks $7.15 billion for exclusive rights to sell Starbucks coffees and teas.

Starbucks' Executive Chairman and co-founder Howard Schultz said earlier this month that he is stepping away from the company on June 26, ending an era. Americans can "get that same flavor profile at a much lower price somewhere else".

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After stores reopened following the May 29 training, sales have started to rebound at USA locations, with the chain expecting domestic same-store sales growth of around 3 percent in June, a person familiar with the situation said. One area executives have targeted is wasted product, which costs Starbucks $500 million a year in the U.S. U.S.net store growth peaked at 6 percent in Starbucks' 2017 fiscal year. It will also try to optimize the store formats it offers, from small mobile-order pickup locations to drive-through to more elaborate high-end Roastery and Reserve stores.

"We're putting more of our energy into that afternoon day part and the portfolio of beverages that are offsetting some of the declines we're seeing in Frappuccino beverages", Johnson said.

The chain is also relying on its digital initiatives to contribute between 1 and 2 percent to comparable sales next fiscal year.

The company also said it expects 1 percent growth in global sales for the third quarter, a period that encompassed an uproar over the arrest of two black men at a Philadelphia Starbucks.

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