Starbucks announced Thursday it will close 250 underperforming stores across the United States this week as part of its ongoing efforts to streamline operations and improve profitability. The affected locations represent roughly 1 percent of the company’s 18,000 U.S. outlets.

Mike Grams, Starbucks’ chief operating officer, said the store closures are due to some locations failing to meet customer experience and financial performance targets. While the North American business overall has returned to strong growth, certain stores continue to lag behind expectations, he noted.

The restructuring is expected to incur approximately $300 million in charges related to lease exits and employee benefits. Despite broader economic pressures affecting restaurant chains—partly driven by higher grocery and fuel costs—Starbucks has sustained customer demand with popular offerings such as Pumpkin Spice Lattes and Strawberry Açaí Lemonade Refreshers.

Under CEO Brian Niccol, who took the helm in 2024, Starbucks has initiated a turnaround plan emphasizing customer service improvements and operational upgrades. Measures include hiring more staff, enhancing technology for faster order fulfillment, and reintroducing familiar elements like cup writing, condiment bars, ceramic mugs, and free refills. Niccol has focused on making stores more welcoming by creating spaces where customers feel comfortable staying.

For the quarter ending June 28, Starbucks reported an 8.1 percent increase in comparable-store sales in North America, reflecting growth among stores open at least one year. The company’s stock has risen nearly 12 percent over the past year, signaling investor confidence in its recovery strategy.

This latest wave of closures follows a significant round last year, during which over 600 underperforming U.S. stores were shuttered. Additionally, Niccol oversaw the sale of a controlling interest—60 percent—of Starbucks’ operations in China to a private equity firm in a $4 billion deal, aiming to reduce drag from less profitable markets.

Though investments in customer experience have boosted traffic, they have also put pressure on profit margins. To address this, Niccol has announced plans to cut $2 billion in annual costs by 2028 as he works to ensure each coffeehouse “earns its place” in the brand’s portfolio.