Starbucks to close 150 stores amid slowing sales

Signage at a Starbucks store in New York

Starbucks announced Tuesday that it is closing 150 of its USA stores in the next year, three times as many as the chain normally closes in that time period.

"That is, in my view, not an acceptable performance and we need to do better", said Johnson, who has been in the top job at the Seattle-based coffee giant for a little more than year.

Johnson laid blame for the disappointing sales growth at the feet of the once-vaunted Frappuccino, which accounted for 14 percent of revenue at company-operated stores as recently as three years ago.

Starbucks shares fell by as much as 5% in after-hours trading Tuesday after the company announced a third-quarter sales forecast that was weaker than analysts had expected.




Starbucks shares are virtually unchanged for the year.

The changes came weeks after Starbucks Executive Chairman Howard Schultz announced he would leave the role in June.

Starbucks apologized and closed 8,000 stores in May for anti-bias training after the arrests of two black men in one of its Philadelphia cafes sparked wide-spread protests. In addition to the lost sales on that day and the costs of the training, Starbucks delayed its seasonal marketing push, which it would have begun in mid-April.

The Seattle-based company announced Tuesday that it will close approximately 150 underperforming stores in its most densely populated US markets amid sluggish sales - up from its usual rate of 50 per year. Starbucks said it would provide additional details on its plans at an investor presentation on Tuesday afternoon. "It is not an excuse", for the 1 percent growth rate, he added. Notably, as from 2019, it plans to shift its focus for new stores away from areas where it already has a strong presence and to underserved markets.

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