Starbucks will close 150 stores in 2019

Starbucks will close 150 stores in 2019

The company says it is closing 150 locations in 2019.

According to CNN, "poorly performing" stores around the country will be getting the ax.

The world's largest coffee chain has faced increasing competition from upscale coffee houses and fast-food chains like McDonald's Corp and Dunkin Donuts in recent years, missing analysts' estimates for same-store sales in the USA -dominated Americas region in five of the last six quarters.

Starbucks Corp forecast on Tuesday slower sales growth than Wall Street expected this quarter and plans to close about 150 USA cafes next fiscal year to boost performance, sending its shares down 2 percent after hours. "Now, in a lot of ways, it's middle America and the South that presents an opportunity".


But now, with Schultz stepping back from his beloved company, the task of the righting the ship will fall to Johnson, who took over as a CEO just over a year ago. Americans can "get that same flavor profile at a much lower price somewhere else". Outgoing chairman Howard Schultz said the training cost Starbucks "tens of millions" of dollars. "That becomes an area of concern for Starbucks". Starbucks closed its USA stores on May 29 to conduct racial-bias training for its employees.

"We're putting more of our energy into that afternoon day part and the portfolio of beverages that are offsetting some of the declines we're seeing in Frappuccino beverages", Johnson said.

Starbucks, which earlier this month raised its prices for the third time in three months, is also dealing with increased competition from places like McDonald's, which has improved its coffee lineup and offers lower prices on many products. It also said that it would return about $25 billion in cash to shareholders through buyback programs as well as dividend offerings - which was about a $10 billion increase from the previously announced target. Starbucks said it also will slow the growth of licensed stores in airports, supermarkets and other retail stores, reflecting criticism that the coffee-shop pioneer was expanding too rapidly.

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