For years, Starbucks has strived to become an inseparable element of the streetscape of New York, Los Angeles and other large cities in the United States. But now this chapter is coming to an end.
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According to CNN, the company has already closed 400 cafes across the country, including 42 in New York, losing its leadership position to Dunkin'. Similar decisions were made in Los Angeles, Chicago and San Francisco.
The chain analyzes the results of 18,000 premises and closes those that do not meet expectations. The new strategy involves opening smaller, better-suited cafes, mainly in the suburbs.
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“In U.S. cities, the number of competitive cafes opening has increased dramatically, stealing customers and lowering sales in our outlets,” says Arthur Rubinfeld, former creator of Starbucks' development strategy, quoted by CNN.
Starbucks no longer wants to be present on every street in large US cities
Hired from Chipotle last year, CEO Brian Niccol was expected to revive and renovate the legendary American coffee chain. Niccol admitted that he no longer wanted the network points to be right next to each other. The restructuring plan, which assumes the closure of the above-mentioned 400 points, is expected to bring savings of approximately USD 1 billion.
The pandemic and remote work limited the number of customers in business centers. Starbucks is also struggling with the problem of homelessness and safety in its premises. The company withdrew its open toilets policy and introduced new rules for guests.
See also: Coffee most expensive in 40 years. Shops and cafes will no longer charge prices themselves
Starbucks plans to renovate and open new cafes, especially in the suburbs. The chain wants to win back customers by offering comfortable interiors and better service.
The changes at Starbucks show how much the coffee market in the US has changed. Before Starbucks came along, people couldn't imagine paying more than two dollars for a cup of coffee, let alone a latte.
Currently, Starbucks is closing its locations in cities, in part because it has been swamped by competition from niche coffee shops, smaller chains such as Gregory's and Joe's Coffee, and a wave of stores offering smoothies, bubble teas and other drinks.
