Starbucks CEO confirms plans to close up to 90 locations by the end of 2026

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STARBUCKS customers will soon see some shutdowns as the chain works to rebrand itself as a community coffeehouse.

CEO Brian Niccol, who took over in September of last year, confirmed the closure decision on Tuesday.

Starbucks is closing down select locations next year (stock image)Credit: Getty

CEO Brian Niccol (pictured) confirmed the shutdowns on TuesdayCredit: AP

Starbucks mobile-order-only locations are getting phased out throughout next year amid the ongoing Back to Starbucks initiative, according to comments from the CEO in an earnings call.

"As part of this work [Back to Starbucks], we plan to sunset our mobile order and pickup only concept in fiscal 2026," Niccol told investors.

"We found this format to be overly transactional and lacking the warmth and human connection that defines our brand."

"We have a strong digital offering and believe that we can deliver the same level of convenience to our community coffeehouses with a superior mobile order and pay experience," he continued.

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"Together, we expect these changes to our operating model and our coffeehouse portfolio strategy will improve and transform the foundations of our North American business so that we are establishing that moment of connection between a barista and their customer, bringing back warm and welcoming coffeehouses..."

Niccol noted on the call that Starbucks currently has between 80 and 90 mobile order and pickup locations nationwide.

As far as standard coffeehouses go, there are more than 17,000.

A Starbucks spokesperson also confirmed to The US Sun in an email that some of the mobile-order-only spots will be converted to coffeehouses with seating.

The move away from the mobile and pickup order model follows along the theme of Back to Starbucks, which centers on coffee quality, simplified menus, community initatives, a personalized guest experience, and a neighborhood cafe-like feeling.

Some Back to Starbucks changes customers may have seen already this year include self-serve condiment bars, free refills on hot or ice-brewed coffees, and the return of hand-written labels on to-go cups.

There's also a strong emphasis on reducing order wait times to less than four minutes after complaints, something Niccol said has improved drastically.

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Alongside the mobile-order-only location removals, Starbucks is continuing to revamp and remodel coffeehouses to be more aligned with the Back to Starbucks values.

Niccol noted that the company would be investing around $150,000 per store for the renovations.

"Uplifts are intended to quickly replace thousands of seats we removed and introduce greater texture, warmth, and layered design," he said during Tuesday's earnings call.

The CEO noted that New York City is currently getting the bulk of the upgrades, with Southern California slated for more at the end of this year.

By the end of 2026, at least 1,000 locations will be uplifted.

Select customers will also see a Coffeehouse of the Future next year, and the building process for a small-scale version is currently underway in New York City, according to Niccol.

"We've also begun work on the Coffeehouse of the Future — we have a new standalone prototype that will open in fiscal 2026 that has 32 seats, a drive-thru, and a roughly 30% lower cost to build," the CEO said.

"A smaller format version, with approximately 10 seats, is under construction in New York City and will open in the next five months."

"We believe this prototype will deliver an exceptional customer experience..." he added.

GETTING BACK UP

Starbucks' actions to improve its business operations and customer experience also come not long after it was dethroned as the top-ranked restaurant in terms of value for Americans this spring.

McDonald's took over the title again after the coffeehouse chain stole it from the fast food giant in 2016.

While McDonald's value grew about 7%, Starbucks' dropped by 36%.

In 2023, coffee chain Luckin Coffee also became the largest in China, again dethroning Starbucks from a top-ranked spot.

Luckin Coffee is expanding to the United States for the first time.

Still, mass closures have been a consistent trend for national chains this year amid Starbucks decision to close mobile-order-only spots.

A beloved burger chain is axing at least 79 spots in the coming months, leaving just 34 left for longtime fans.

After shutter 15 spots in May, a popular restaurant also confirmed it would "sell off" all remaining locations this summer.