Starbucks plans to close 150 locations

Starbucks plans to close 150 locations

Starbucks plans to close 150 locations

Starbucks will be closing 150 poorly-performing stores in 2019.

The company made the announcement after lowering its guidancefor comparable same-store sales growth in the current quarter to just 1%, well below the 2.9% expected by analysts.

The company anticipates lower net new store growth in the United States for fiscal 2019 and said it would take steps to address rapidly changing consumer preferences by introducing new beverages, focusing on growing health and wellness trends.

Historically, the company closes around 50 stores a year, the company stated in a press release. That prompted Starbucks, whose executive chairman and founder and former CEO Howard Schultz is leaving the company next week, to give investors an in depth update on its plans to kickstart growth.

The coffee giant said Tuesday that it will close 150 USA stores in its 2019 fiscal year, triple the number it has closed on average in recent years.

Starbucks fans may be in for some bad news.

Although business overseas has been booming and the chain has been opening more and more cafes, US sales growth has stalled for the company that brought espresso to the masses. It's also exploring options to license some company-operated stores "in other appropriate markets", it said.

The company faced a backlash earlier this year when two black men were arrested at one of the company's Philadelphia locations when staff called the police.

Analysts also pointed to lower-than-expected same-restaurant sales in five of the previous six quarters at Starbucks' Americas business, which is dominated by its roughly 8,000 US cafes.

Oversaturation of the market could also be an issue plaguing the coffee chain, which is why the store closings will be focused on urban areas with a higher concentration of Starbucks locations.

The company also said it would look to cut general and administrative expenses with plans to partner with an external consultant to speed up the process.

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