Starbucks closing 150 stores

Starbucks Announces Major Store Closings Coming in 2019

In the past year, Starbucks has opened nearly 1,000 new stores in the Americas, which includes the U.S., Canada and Latin America. By 2019, the company plans to cut that growth rate to 3 percent. That alliance frees Starbucks to focus on improving its mainstay US cafe business, where traffic growth had stalled.

'While this is not limited to Starbucks, we're committed to being a part of the solution, ' said Johnson, a former technology executive who took the helm about a year ago.

Meanwhile, sales are expected to grow just 1 percent in the next quarter.

Starbucks' Executive Chairman Howard Schultz stepped away from the company in June surprising investors at time when the company has faced raft of worrying headlines. Americans can "get that same flavor profile at a much lower price somewhere else".

The company says it is closing 150 locations in 2019.

Starbucks has also faced backlash this spring after two black men were arrested at one of its stores in Philadelphia while waiting for a meeting to begin. Last month, Starbucks closed about 8,000 cafes so its employees could undergo racial-bias training, which did hurt sales in the quarter, Johnson said.

Oversaturation of the market could also be an issue plaguing the coffee chain, which is why the store closings will be focused on urban areas with a higher concentration of Starbucks locations. Its global comparable store sales increased 2 percent.

Starbucks Corp. (SBUX) plans to close 150 company-owned stores next year and put the brakes on the number of new licensed stores it opens.

Analysts also pointed to lower-than-expected same-restaurant sales in five of the previous six quarters at Starbucks' Americas business, which is dominated by its roughly 8,000 USA cafes. "But the current political environment with trade wars looming or the governments picking at each other-it definitely casts a shadow over the long-term prospects for large western brands that are in China".

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