Starbucks to close some UK stores amid global cuts; number of stores and staff at risk undisclosed

Starbucks said Thursday it will close some of its UK cafés as part of a broader global cost-cutting program, launching a consultation on a number of company-owned stores with staff potentially affected. The company did not disclose how many stores or how many workers would be impacted.

Starbucks runs around 520 company-owned stores in the UK, with additional franchise-owned shops operating separately. It is understood that more than 5,600 people work for Starbucks across the country. The chain said it is planning to close sites where it has not been able to create the physical environment customers want, and where the stores are not sustainably profitable. The disclosure left unclear where the closures would take place or how many locations would be affected, prompting questions from workers and investors about the scope of the portfolio review.

Despite the closures, Starbucks said it remains on track to open 80 new sites in the UK and is committed to its footprint in the country. The company also revealed that it will reduce its portfolio of stores in North America by one percent this year and will cut around 900 head office jobs there. The announcements come as part of a broader plan from chairman and chief executive Brian Niccol, who took the helm about a year ago and has pressed for a leaner, more performance-driven portfolio.

In a statement, Starbucks said: "We have conducted a review of our coffeehouse portfolio in North America and certain stores have been identified for closure where it has not been possible to create the physical environment customers and partners (employees) want, and where there isn't a path to financial performance. In Europe Middle East & Africa (EMEA), we have conducted a similar review of our company-operated store portfolio with the goal of ensuring that our stores are correctly located, generating appropriate levels of foot traffic and operating in the right formats. While the EMEA business is on track to meet its commitment to open 80 new stores in the UK and 150 across EMEA this financial year, some stores in the UK, Switzerland and Austria will close as a result of this portfolio review."

Those moves come as Starbucks faces a shifting competitive landscape in coffee retail. In February, Niccol announced plans to lay off about 1,100 workers, a move that followed criticism over his use of a private plane for travel between California and Seattle. The leadership shift mirrors a broader effort to streamline operations and focus on higher-traffic, higher-margin formats.

The UK closures occur alongside a larger strategic pivot in the sector. Costa Coffee, the UK’s largest coffee chain, has been pursuing an aggressive expansion into the United States. Costa, which operates roughly 2,500 cafés in Britain and countless self-serve machines, has been pushing a modern, machine-driven model that can replicate cafe experiences without a traditional barista staff. Costa’s Smart Cafés can prepare up to 200 customizable drinks, hot or cold, in about 90 seconds and are designed to operate with minimal on-site labor. Since Coca-Cola acquired Costa in 2018, the brand has pursued a U.S. footprint that includes experiments near Coca-Cola’s Atlanta headquarters and plans to deploy more machines across campuses, hospitals, convenience stores and airports.

For Starbucks, the shift comes as it remains the leading U.S. coffee chain but continues to deal with customer churn and the challenge of turning around a business that has seen declining foot traffic in recent quarters. The company’ strategy includes pruning underperforming locations and focusing on formats and markets with the strongest return profiles, even as it continues to pursue growth in select regions and segments.

Beyond the corporate portfolio, the global coffee market has notable competitive dynamics. Luckin Coffee, a Chinese rival, has intensified a push into expanding cafe presence and drink options in North America and beyond, intensifying pressure on established brands to innovates and tune pricing to attract younger consumers. The competitive backdrop is shaping investor expectations as Starbucks navigates a period of portfolio recalibration while pursuing a more disciplined expansion plan.

As the company moves through this phase, workers and industry observers will be watching closely for details on which specific UK stores will be affected and the ultimate impact on staffing. Starbucks did not provide a store-by-store breakdown or a timeline for the closures, noting that the consultation process with affected employees and partners will run in line with local laws and regulations. The company reaffirmed its commitment to the UK market, emphasizing ongoing plans to open new locations even as it trims others, and to continuing the broader European and Middle Eastern expansion strategy that the company has outlined for the current financial year.