Published: Thu, June 21, 2018
Culture | By Margie Dunn

Starbucks To Close 150 U.S. Stores as Sales Growth Underwhelms

Starbucks To Close 150 U.S. Stores as Sales Growth Underwhelms

The affected stores are located in mostly urban areas that are densely populated with Starbucks locations. Schultz had operated Starbucks at a growth rate that has made many people a lot of money, as stock prices have increased in eight of the last 10 years.

"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", Johnson said in a statement.

The company said comparable sales growth at existing stores, a key measure of retail performance, was expected to be just 1 percent in the current quarter, despite a booming economy and a broadly healthy restaurant industry.

The company closed 8,000 cafes on May 29 so 175,000 employees could undergo racial tolerance training.

Starbucks closed its USA stores on May 29 to conduct racial-bias training for its employees. "We must move faster to address the more rapidly changing preferences and needs of our customers". Schultz, who had already transitioned away from running the coffee chain's day-to-day operations, announced earlier this month he'd be leaving the company, fueling speculation he could be gearing up for a political career. That's their lowest quarterly growth since 2009, Bloomberg.com reported.

The company also said it would look to cut general and administrative expenses with plans to partner with an external consultant to speed up the process.

Johnson said Starbucks has not reached saturation point in the US, but it will be more strategic about where it puts new stores, focusing on underpenetrated markets in "Middle America". Management also plans to reduce the number of new licensed stores in 2019 by about 100 stores, according to CNBC. That alliance frees Starbucks to focus on improving its mainstay USA cafe business, where traffic growth had stalled.

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