Starbucks, the renowned coffee chain, is re-evaluating its business strategy in downtown San Francisco, with plans to close seven stores in the heart of the city, all the while launching, reopening, or renovating other branches throughout.
The company’s decision aligns with their annual review of store portfolios, a process by which Starbucks assesses necessary investments, renovations, and alternative formats to optimize its store presence.
“When faced with the challenging decision to shutter a store, Starbucks deliberates upon several vital factors. It’s all an integral part of maintaining a robust store lineup,” Jessica Borton, Starbucks’ regional vice president for Northern California, penned In a Monday letter to the affected store employees.
The letter, as reported by the San Francisco Business Times, further emphasized the company’s commitment to its partners, stating, “Our primary aim is to ensure our partners can concentrate on delivering quality beverages and fostering genuine connections in a warm and welcoming milieu.”
Effective October 22, Starbucks branches in the neighborhoods of Financial District, Cathedral Hill, South of Market (SoMa), and Union Square will cease operations. Stores located at Mission and Main, Geary and Taylor (a pickup-only spot), 4th and Market, and Bush and Van Ness intersections are among those set for closure.
In a reassurance to the employees of the affected stores, Borton’s letter stated that they would be provided options to relocate to nearby Starbucks outlets.
“We are actively facilitating transfer opportunities for every partner impacted by this decision. Our commitment stands firm in continually engaging and supporting our partners to ensure their well-being during this phase,” Borton assured.
San Francisco has fallen prey to major increases in crime, rising homeless population and a huge drug crisis causing many prominent retailers, including Whole Foods, Nordstrom, Old Navy, and Walgreens, to withdraw from major shopping destinations like the iconic Union Square and the Westfield Mall on Market Street, which has experienced default.
However, Starbucks is not entirely retracting from the San Francisco market. The company has earmarked a significant $2.5 million to revamp four of its stores, which includes two in Union Square, one in Noe Valley, and another in Outer Sunset.
Moreover, Starbucks has recently inaugurated or re-introduced three stores in San Francisco, marking its presence in Union Square with a new location, rolling out a delivery-only outlet, and transforming a Market Street branch into a pickup-only hub.