Does America have too many Starbucks? The coffee giant will shut down 150 of its worst-performing stores next year, CNN reports, most of them located in urban areas that are already saturated with Starbucks locations.
The company projects same-store sales growth of just 1 percent for the next sales quarter, acknowledging Tuesday on an investor call that while “not an excuse,” shutting 8,000 of its U.S. stores down on the afternoon of May 29 for racial bias training following the highly publicized arrest of two black men in Philadelphia “had an impact.”
“...Our recent performance does not reflect the potential of our exceptional brand and is not acceptable,” CEO Kevin Johnson said in a statement.
A press release outlines the company’s plans for growth, including “lower net new store growth in the U.S.” and focusing its new openings in “under penetrated markets.” (Starbucks will continue expansion in China, where it’s currently opening a new store every 15 hours.)
The company also plans to debut “a redesigned Starbucks Rewards program that provides customers more choice around redemptions and payment,” while new product launches will take advantage of consumers’ current obsession with “health and wellness.” Per CNN, sales of sugary Frappuccino beverages have fallen by 3 percent so far this year.
Executive chairman and longtime figurehead Howard Schultz is slated to leave the company next week, fueling rumors that he’ll run for political office. Meanwhile, Starbucks will open its first store in Italy with a September opening in Milan. This has already prompted backlash from Italians.