Starbucks is taking steps to stop the downturn in it’s business over the past two years:
As it begins a major turnaround effort, Starbucks on Wednesday announced a slight gain in quarterly profits and a significant slowdown in the rate of growth in the United States as it seeks to recapture its former glory.
Howard D. Schultz, the chairman and chief executive, said in a statement that he would close 100 underperforming stores in the United States as part of a major restructuring, though he did not identify the locations.
Starbucks plans to open 1,175 new stores in the United States in the coming year, down from an earlier goal of 1,600 new stores. “By reducing the number of openings, we expect to optimize our resources and potentially reduce cannibalization of our existing stores,” he said in the statement.
At the same time, the company raised the number of international stores that it plans to open to 975, from 900, as business overseas remains robust.
What remains unclear is how Mr. Schultz will recapture the cachet that made Starbucks a customer favorite and Wall Street darling. In a memorandum that was leaked last February, Mr. Schultz bemoaned the “commoditization” of the Starbucks experience.
It’s hard to not become commoditized when you’re taking about adding an addition 2,000 stores worldwide in the course of a single year.
