Why Starbucks is closing these six Philly locations
Starbucks has seen sales decline over six consecutive quarters.
Starbucks, the Seattle-based coffee powerhouse, announced last week that it would immediately shut down hundreds of underperforming stores and eliminate 900 corporate positions.
The cuts come as Starbucks has seen sales decline at stores open for at least a year for six consecutive quarters. The company’s shares have fallen about 12% in the past year.
The chain is grappling with rising labor costs, in addition to rising coffee prices.
Which Starbucks stores closed in Philadelphia?
1500 Market St.
1709 Chestnut St.
1128 Walnut St.
1900 Market St.
1801 Spruce St.
490 N. Broad St.
How did Starbucks choose stores to close?
Starbucks chose to close “coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance,“ CEO Brian Niccol wrote in a statement last week. Niccol became CEO of the company about a year ago.
Starbucks said it would end the fiscal year with 18,300 stores across North America, down from 18,734 in June.
According to the Washington Post, Starbucks expects to spend $1 billion on the restructuring. That figure includes $150 million on employee separation benefits and $850 million tied to the physical store closings and the price of exiting leases.
Are there still Starbucks in Philly?
According to Starbucks’ website, there are currently more than 30 Starbucks locations within Philadelphia’s city limits, including kiosks in grocery stores, hospitals, and on university campuses.
The chain also maintains a large footprint in the nearby suburbs.
What do workers say?
Employees impacted by the store closures were notified Friday.
On Sunday, about 35 Starbucks union members gathered in front of the location at 16th and Walnut Streets in protest. They say they’re prepared to strike if the company doesn’t return to the bargaining table to negotiate higher wages, staffing levels, and healthcare benefits.
Over the last few years, Starbucks baristas in Philadelphia and beyond have taken efforts to improve worker protections. Some have been successful in establishing unions, while others have not. According to Starbucks Workers United, there are more than 12,000 unionized Starbucks baristas at more than 650 stores.
Three of the closed stores in Philadelphia — 1801 Spruce St., 1709 Chestnut St., and 1500 Market St. — are not unionized. Three others — 1900 Market St., 1128 Walnut St., and 490 N. Broad St — are unionized.