Starbucks to close 1% of stores in North America, lay off 900 employees, analysts cite three main reasons

Starbucks announced on Thursday that it will close 1% of its stores in North America this month. These store closures and the layoffs of 900 corporate employees are part of a $1 billion restructuring plan. Analyst RJ Hottovy from Placer.ai, a company that tracks foot traffic, said the closures are due to consumers moving away from city centers during the COVID-19 pandemic. The chain is now exiting leases in areas where business has significantly declined. Starbucks is also facing competition from independent coffee shops, growing chains like Blank Slate Coffee and Blue Bottle Coffee, and fast-growing companies like Dutch Bros. Customers are also hesitant due to the chain's prices. A recent survey by UBS found that over 70% of respondents plan to reduce their visits to Starbucks in the next 12 months due to price increases. The survey also found that Starbucks is struggling the most among those with incomes below $100,000.