Starbucks is slowing its U.S. expansion, planning only modest growth in new locations through at least 2027. Executives maintain there is still room to open more coffee shops across the country.
The chain operates over 41,300 stores globally, trailing only McDonald’s. During an investor update, the company stated North American development will remain measured for the next few years while international markets drive most unit growth.
U.S. growth stalls as Starbucks reworks its strategy
The North American footprint expanded by just 0.5% over the past year, a sharp slowdown from previous rates. Starbucks closed about 2% of its locations in the region, including both corporate-owned and licensed stores, as it reassessed its approach.
The company has averaged about 44 new U.S. stores per quarter in North America over the past three periods, after averaging well over 100 before closing 435 corporate locations late last summer. Licensed locations, often found in airports or retail partners like Target, have also declined, with 71 closures over the past three quarters.
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CEO Brian Niccol admitted the previous development strategy had flaws. He explained that some stores required difficult remodels or were placed in unsuitable locations. The company is now addressing those issues.
Part of the cleanup involves shutting underperforming locations, particularly takeout-only and pickup stores that missed expectations. Niccol said they have improved their ability to identify problem stores and will replace them with better-positioned ones.
International markets pick up the pace
While U.S. growth remains cautious, Starbucks is relying on international markets for expansion. The company opened 254 new stores abroad over the past three quarters, though that number is less than half of what it added during the same period a year earlier. Executives expect the pace to quicken.
Niccol mentioned testing new store prototypes globally that could accelerate growth. Those designs are being adapted for the U.S., especially in the Midwest and Southeast, where the company sees potential.
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The chain is also increasing remodels in the U.S., with 650 locations updated last quarter. It plans an extra 500 next year.
Niccol emphasized the focus isn’t on rapid expansion. He stated they will fix problem stores first, then build a pipeline of well-placed locations. The approach follows three consecutive quarters of positive same-store sales, indicating existing locations are performing well despite slower new openings.
That stability may allow the company to refine its strategy before resuming faster growth. If the current pace continues, the U.S. footprint could look more carefully selected in a few years, though not necessarily larger.
The real test will be whether the remodeled and repositioned locations deliver sufficient returns to justify the slower expansion. For now, Starbucks appears comfortable moving deliberately, even if it means fewer new stores in the near term.