Starbucks plans to close up to 200 cafes across Canada to respond to changes in consumer habits during the COVID-19 pandemic. The Seattle chain is restructuring its business operations in Canada as part of a two-year plan.
The details were included in a letter to shareholders filed Wednesday with the US Securities and Exchange Commission.
“As the recovery continues, we are now laying the foundation for a more transformative phase -” restoring and building resilience “- allowing us to accelerate the transformation of our activities,” the company told shareholders.
Starbucks said it generally closes a hundred corporate stores each year in North America, largely due to the expiration of leases. The latest round of closings would exceed this figure in Canada only.
Some of the Canadian stores that will be closed will be “repositioned,” the company said, suggesting that they could either move to a new area or change format.
The company has experimented with locations that only offer coffees. The first Canadian Starbucks store to use the new format launched in January in Toronto.
“These test stores have provided us with information on how to optimally integrate this new format with nearby cafes,” the company said.
“While we originally planned to execute this strategy over a three to five year period, rapidly changing customer preferences are accelerating the need for this concept and we are now considering the accelerated development of Starbucks Pickup stores … including renovation and repositioning of many existing cafes to expand our store portfolio with a mix of appropriate store formats. ”
Starbucks said it plans to open new locations in other parts of the world, including China, but is slowing structural growth in North America.
The company plans to add 300 new stores this year, a smaller target than its original 600 locations, but that will come with the closure of up to 400 corporate stores in the next 18 months.
This Canadian Press report was first published on June 10, 2020