Coffee retail giant Starbucks announced Tuesday its plan to close approximately 150 stores across the United States as a result of "slow growth", sending the Seattle-based corporation's stock prices down almost 7%. Notably, as from 2019, it plans to shift its focus for new stores in the USA away from areas where it already has a strong presence and to underserved markets.
"Our recent performance does not reflect the potential of our exceptional brand and is not acceptable", CEO Johnson said in the statement.
Starbucks said it expects global comparable store sales to rise 1 percent in the third quarter, below the 3 percent increase estimated by analysts, according to Thomson Reuters I/B/E/S.
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The Seattle-based company announced that it will close 150 under-performing stores in heavily penetrated markets, up from the usual rate of 50 closings a year.
Here, Johnson says the company still has work to do to improve in-store efficiently and make the most out of its loyalty programs.
"The company's streamlining initiatives will enable greater agility in adapting more quickly to changes in consumer preferences, " the company stated. Last year, sales of the sugary blended beverage were up 4 percent, compared to 5 percent in 2016 and 17 percent in 2015.
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Starbucks' Executive Chairman Howard Schultz stepped away from the company in June surprising investors at time when the company has faced raft of worrying headlines.
Starbucks also announced a number of strategic changes.
The company closed 8,000 cafes on May 29 so 175,000 employees could undergo racial tolerance training.
In early May, Swiss-based Nestle said it would pay Starbucks $7.15 billion for exclusive rights to sell Starbucks coffees and teas.
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