Starbucks plans to close seven stores in downtown San Francisco by October 22. According to a letter revealed by the San Francisco Business Times, the soon-to-close locations are scattered throughout the neighborhoods of SoMa, Union Square, Financial District, and Cathedral Hill. This move is a part of Starbucks' wider strategic reinvestment plan which includes opening new outlets, refurbishing existing ones, and exploring alternative formats.
Jessica Borton, Starbucks' regional vice president for Northern California, conveyed the decision to close in her letter as a "very difficult decision". She stressed Starbucks' commitment to the city as there were plans in the pipeline to reinvest $2.5 million in renovations at four San Francisco stores. Interestingly, two of these locations are in Union Square, underlining Starbucks' intention to reinforce its footprint there.
As per the report from SF Eater, Starbucks is not alone in recalibrating its operations in the Bay Area. Peet's Coffee shut down several downtown outlets in San Francisco during the pandemic and is transitioning to a faster, kiosk-centric model. Likewise, Starbucks is testing "grab-and-go" concepts at select newly reopened stores aiming at online customers and those who benefit from quick service, like the location at 333 Market St.
Undeniably, the persisting pandemic has made indelible imprints on retail operations. Despite multiple efforts to rejuvenate downtown areas, office vacancies remain high; reduced foot traffic as employees keep remotely working has led to lower demand for coffee shops. Besides, Starbucks is to overcome a slew of labor relations difficulties as it faces numerous worker complaints filed with the National Labor Relations Board.
Other retail chains like Walgreens and Target have wound up operations of their stores in downtown San Francisco; Target in fact has shuttered three locations in the Bay Area, including one in SoMa. However, it should be pointed out that Starbucks' impending closures will not lead to worker layoffs, with the company facilitating transfers to adjacent branches, as reported in the San Francisco Business Times.
Borton affirmed in her letter that adjustments to change in customer base due to fewer downtown workers and tourists do not imply an exit of Starbucks from San Francisco. Rather, the company recalibrated its approach to better cater to its customers' needs. According to Borton, Starbucks ensures to listen continuously to their associates' needs in order to deliver quality beverages and nurturing connections in a friendly atmosphere.
The seven stores that will close down include:
- 201 Mission St.
- 442 Geary St.
- 425 Battery St.
- 398 Market St.
- 780 Market St.
- 555 California St.
- 1401 Van Ness Ave.
The four branches targeted for renovation and investment features:
- 201 Powell St.
- 390 Stockton St.
- 3995 24th St.
- 1800 Irving St.
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