Starbucks closing 600 stores in the US
July 6, 2008
Premium coffee retailer Starbucks Corp. announced that in the next year, it will close around 600 company-operated stores in the United States. The move was a response to the company’s weakening profitability, hurt partly by the struggling economy in the US.
Starbucks will be closing 19% of all company-operated stores that opened in the last two years. It did not mention which stores will be affected but they will come from various parts of the US.
The closings are expected to occur between late July and the middle of 2009. About 12,000 workers, or 7% of the global work force of Starbucks, will be affected.
As of March 2008, there were around 16,226 Starbucks locations around the world. Out of these, 7,257 are operated by the company in the U.S. and 1,867 abroad. The remaining 7,102 stores are run by partners who license the Starbucks brand.
With this latest development, the plan to create “a Starbucks on every corner” will surely be put to a temporary halt.