why is starbucks closing stores in canada

Starbucks is closing stores in Canada as part of a broader North American restructuring plan to reduce the total number of stores by about 1%, which means closing roughly 400 locations across the U.S. and Canada. This decision is driven primarily by the company's evaluation that many stores are underperforming financially or unable to create the expected physical environment for customers and staff. Starbucks CEO Brian Niccol highlighted that these locations lack a viable path to profitability or do not meet the customer and partner experience standards the company wants to maintain. The restructuring involves closing these less profitable or unsuitable stores, laying off around 900 non-retail employees, and providing transfers to nearby locations or severance packages for those affected. The plan is part of a $1 billion investment to refocus Starbucks on improving the customer experience at the remaining stores and upgrading over 1,000 locations. This move follows six consecutive quarters of declining same-store sales and aims to strengthen the company's long-term growth by concentrating resources where they can be most effective. In Canada, dozens of stores have already closed or are scheduled to close as part of this plan, with some employees receiving very short notice. Starbucks plans to end the fiscal year 2025 with about 18,300 stores in North America combined, a slight decrease from previous years, while intending to resume expansion in fiscal 2026. Overall, the closures are a strategic effort by Starbucks to manage costs, improve store quality and profitability, and adapt to changing consumer behaviors amid increased competition and economic challenges like inflation.