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I'm a Boston guy, so I pretty much run on Duncan. So, when I noticed this Starbucks shut down, I got to be real, I didn't think too much of it. But then I saw this one and this one and this one.
In September, Mass Live reported that nine Starbucks stores were marked for closing in Boston alone. And it's not just here. Across North America, Starbucks closed roughly 1% of its company operated stores at the end of its 2025 fiscal year. At first, it just looked like a company pulling back. But in reality, it's the loudest signal yet that CEO Brian Nichols' back to Starbucks strategy, the one he announced in late 2024 as Starbucks reported a 6% sales decline in North America, is taking flight. The changes so far might feel subtle, but what's coming next could completely change what Starbucks is and who it's really for.
To understand how Starbucks ended up here, we got to understand a little bit more about coffee culture. There are three waves of coffee culture. Wave one is all about convenience and mass production. Think soldiers. Coffee as a household staple. Starbucks sits right here in the second wave. The era of coffee as a social ritual. This is when we began making cafes an integral part of our everyday life. Just look at these photos. They were cozy, coffee-centric with a really, really strong '90s vibe. You can almost smell the turtlenecks and Norah Jones in the air. People came to drink coffee and to hang out, just like they did at the indie cafes popping up around the same time.
Which brings us to the third wave. This era treats coffee like wine. Origin, flavor, and craft really matter here. This is coffee as an art form. These third-wave cafes also fall into what are called third spaces. You've definitely heard the term before. Basically anywhere that's not home or work, like a bookstore or a coffee shop. These spaces emphasize connection and a community-focused pace. If any of that sounds familiar, it's because this is what Starbucks used to say it wanted to create. I say "used to" because now it's different.
Here's a photo of Starbucks today. At first glance, it still feels familiar. Warm lighting, background jazz, and that $7 reminder that you're in a late-stage economy. But in the words of that monkey from The Lion King, look harder. After experiencing rapid expansion in the late 1990s and early 2000s, Starbucks shifted its focus from preserving the community-centric cafe experience to scaling it. The company tested its first drive-thru in 1994, and by 2014, about one-third of US stores had drive-throughs, generating around 45% of Starbucks's operating profit, according to the Suffach News Herald. In this press release, you can see the trade-off forming. Starbucks says it wants cafes where people sit and linger, but in the exact same breath, it celebrates pioneering ways to make the grab-and-go experience faster. Another one of those ways was when Starbucks launched mobile ordering in 2015. By 2021, mobile ordering had grown to nearly a quarter of all US transactions. The new focus on speed fueled explosive growth, millions of new customers, and record profits.
"They've gone too far by way of efficiency. Really kind of uh trying to be all things to all people when that wasn't necessarily what they they were best at in the first place." That's Katherine Tangalaka's Liippard, a senior reporter with Business Insider who covers the food and restaurant industries, but specific for our case right now, Starbucks.
"They focused for several years on their mobile-only like kind of pickup stores that didn't have any seating at all and like were kind of built for hyper-efficiency, built to get in and get out. And that just isn't where Starbucks has historically thrived."
The cafes became pickup points rather than gathering spaces. Younger customers, especially millennials and Gen Z, began turning instead to smaller coffee shops, places that felt personal, local, and human. Because the not-so-secret little secret is that when people feel at home in a cafe, they stay longer. And the longer they stay, the more they spend.
Starbucks CEO Howard Schultz himself recognized the trade-off. In a 2007 internal memo, he warned that Starbucks was losing the distinctive experience that made it special. By 2024, the new CEO, Brian Nickel, admitted that Starbucks had strayed from its roots. That same year, he introduced a plan to fix it. A strategy called "Back to Starbucks." I'll get into the specifics later, but on a big picture level, the plan focused on reducing wait times and refocusing on coffee and human connection. Essentially reminding you why you fell in love with Starbucks.
But turning around a brand this size isn't easy. Despite positive earnings, Starbucks's North American comparable store sales were negative each quarter between Q2 2024 and Q3 2025. A clear sign that its efficiency-driven model was losing steam. It's a cycle many companies fall into, chasing scale so quickly that they outrun the very thing that made people care in the first place. Starbucks wasn't just growing bigger, it became the complete opposite of what it promised to be. But a pivot was already underway.
It's worth remembering that turnarounds like this don't just happen by accident. At The Hustle, we break down the stories behind business reinventions just like this one. Who's pulling the strings? What's working? And what it really cost to change direction. From billion-dollar resets to small business pivots that actually pay off, our daily newsletter gives you the context behind the headlines fast, sharp, and free. Just scan the QR code and subscribe to the Hustle newsletter to get the next big brand story before everyone else does.
Remember when Nickel said Starbucks was all about coffee and connection? Well, here's what that means in practice. In October 2024, Nickel told investors they'd be bringing the Sharpies back to Barista's Baby. All right, I added the "baby" part, but he said they'd be bringing them back to write inspirational messages to customers like this one I got in my cup this morning that says, "You're doing amazing." In the same call, he also set a new goal. Every drink made and delivered in under 4 minutes. So, how did baristas feel about adding inspiration on top of a 4-minute timer? But seriously, a Reddit comment on a video of the 4-minute rule announcement perfectly captured the irony here with one user saying, "Four minutes or less, but they want a love letter on every cup."
By early 2025, Starbucks was in full cleanup mode. According to the company, it cut roughly 30% of its North American menu by prioritizing fewer drinks and ingredients. Be honest. What's the most complicated drink order you've made or have overheard someone make? Drop it down in the comments. It's not rocket science. By removing redundant, slower-selling, and complicated items, Starbucks could move faster and more efficiently.
Then came the workflow overhaul. In August 2025, the company began rolling out a new system called the Green Apron Service. Corporate speak for "let's make baristas' lives easier." It came with new tools as well as a new workflow. Before this initiative, baristas floated between every task, taking in-store orders, managing mobile pickups, making drinks, and restocking all at once. The new approach introduced clearer roles and workflows with dedicated baristas for drive-thru and mobile channels, allowing each person to focus on specific stations. It's like that scene in the McDonald's movie.
"It's a symphony of efficiency, not a wasted motion."
Did the employees love it? Based on the vibe of the comments in a Reddit thread about the Green Apron Service update, baristas would support the changes if stores actually had the staff to make them work. Many mentioned losing partners without replacements and not having enough labor hours, pointing to short staffing as the real issue.
But what Starbucks did next didn't have to do with the menu or the workflow. It was a shift in how the entire company was built to operate. In September 2025, Starbucks revealed a $1 billion restructuring update to its "Back to Starbucks" plan. It wasn't about opening more stores or chasing new markets. It was about refocusing on what happens inside the one Starbucks already had. To make that possible, Starbucks eliminated 900 corporate jobs.
When you think about those cafe photos from earlier, I didn't just call those out for a fun throwback moment. They were a clue. Because the way a space looks says everything about what a company truly values. As part of this new plan, Starbucks announced it will uplift more than 1,000 cafes over the next year, complete with warmer lighting, softer seating, and layouts designed to invite people to actually stay a while. Visually, it's a big shift. Take a look at this.
Here we have the pre-uplift design. According to the SF Standard, in 2023, this downtown San Francisco Starbucks had already removed most of its seating in favor of a pickup-only layout. Just a few stools and small tables pushed up against the walls, if any, and a prominent mobile pickup shelf up front, built for speed. Versus the new elevated cafe design Starbucks has detailed in its uplift plans. The pickup shelves and the drive-through windows are definitely still there, just blended better into a space that actually invites you to stay. Comfier seating, warmer colors, local art, open layouts, and easier pickups with new risers at the counter. It doesn't look like the '90s, but it definitely doesn't look like the 2020s.
But not every store can make that jump. Some of the cafes marked for closing simply don't fit this new blueprint. Some locations are either too small or stuck in situations that make renovation nearly impossible.
"They had an SEC filing that came out the morning of the closures that indicated there were multiple millions of dollars worth of closed lease or like early terminated lease costs that were associated with this sweeping closures."
Starbucks holds leases for many cafe locations, often under multi-year contracts, some up to 20 years. Because these leases lock in layout constraints and landlord rules, many cafes can't be reconfigured until the lease expires. So instead of retrofitting every single location, Starbucks is consolidating, rebuilding only the stores that can deliver on the experience it's trying to sell. And it's not the first brand to do this. Think of when McDonald's modernized its dining rooms or when Apple redesigned its stores around the town square concept. Both companies realized that their physical spaces weren't just sales points. They were statements about what the brand stands for, and that could change who it's for.
While Starbucks hasn't officially announced a premium pivot, it has been pretty clear about what it wants. Higher quality, more profitable transactions. Tack on moves like scaling back discounts, and it's a pretty clear signal. So far, the early signs look promising. Starbucks says the cafes that got the new uplift are seeing customers visit more often, stay longer, and receive their orders faster. Of course, that's according to Starbucks themselves, so take it with a grain of pumpkin spice.
But you can see the early impact of its broader strategy reflected in its latest financial reports. In Q1 of 2025, same-store sales declined less than analysts expected. A small win, but a meaningful one after six straight quarters of slowdown.
"So, customer satisfaction scores Starbucks says are up and all the analysts that I speak to are pretty optimistic. Brian Nickel has a really kind of extensive history of executing really quality turnaround campaigns. So, nobody's counting them out just yet. That said, uh I think people had some initial enthusiasm uh and some expectations that this would be done very quickly that have not been able to be met."
Even if momentum's been slower than expected, the numbers are finally starting to show signs of life. As of Q4, US comparable store sales stabilized at flat for the first time in seven quarters. For the first time in years, it feels like it's heading in the right direction.
Starbucks learned something most big brands eventually do. Growth can't replace connection. You can open thousands of stores, add convenience with mobile ordering, even perfect the 3-minute latte. But none of that matters if people stop feeling something when they walk through the door. Unless that feeling is, "Why is my name spelled Thory again?" Seriously, they used to do that. Thory.
So when you ask how a company like Starbucks ends up here, "they they stumbled for a few years. And I think they would acknowledge that that that they maybe uh tried to be too much and and expand to be more than more than just the classic local coffee house that they they ever needed to be. And I think they are starting to get back to that, but it's uh it's not a short uh proposition to get that back to where it needs to be."
At its core, Starbucks isn't just rebuilding cafes. It's rebuilding a feeling. The one that made people want to stay in the first place. If you want to hear a tale of a brand that never forgot how to make its customers feel something, go check out my friend Noel's story about how the world fell in love with instant coffee by way of Nescafe. As always, if you like stories like this, brands trying to find their soul again, subscribe to the Hustle newsletter.
"He gave up the habit. He thought he was out, but mornings got longer and coffee got worse this fall."
"I can't keep doing this, man. Now there's only one place left."
"Grande caramel latte for Tori."