Starbucks says closures in Edmonton a ‘normal part of doing business’

As several Starbucks coffeeshops around Edmonton have recently closed or are set to close, retail experts say that the move is most likely a strategy, as opposed to signs that the company is struggling.

“They have perhaps over expanded a bit in a few areas and are making an adjustment,” said associate professor John Pracejus, the director of the University of Alberta’s Business School of Retailing.

Global News reached out to several Starbucks locations around the Edmonton area and confirmed that the Westgate store at 90 Avenue and 190 Street was already closed, along with the High Street Location at 102 Avenue and 125 Street. The Grange location on Guardian Road is set to close on Oct. 14.

Starbucks would not confirm to Global News exactly how many stores would be closing or when, but said in a statement that it considered the closures to be a “normal part of doing business.”

“Every year we open many new stores, we close some and renovate/relocate a few others,” the statement reads. “We consider many factors when we make these decisions. We’ve opened five new stores in Edmonton in the last six months and will open eight new stores in FY20, and a handful are scheduled to be renovated.”

“I think it’s probably more a tactical maneuver to optimize the number of stores they have… and essentially save costs at underperforming locations,” Pracejus said.

Tweet This Click to share quote on Twitter: "I think it's probably more a tactical maneuver to optimize the number of stores they have… and essentially save costs at underperforming locations," Pracejus said.

“In a world where Starbucks has nothing but expanded for many years, of course people have the expectation that the number of Starbucks is only going to continue to increase everywhere.

“That doesn’t mean that every single store that they open needs to stay open forever.”

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American investment giant Piper Jaffray released the results of its annual Taking Stock With Teens fall survey on Oct. 8. It spoke to 9,500 American teens, and Starbucks came in as the second-most preferred restaurant for Generation Z.

As for the stock market, in October 2018, SBUX sat at $58.27 USD a share. On Wednesday, the shares closed at $85.85 USD.

“I doubt this has anything to do with reduction in sales and reduction in growth,” Pracejus said.

Starbucks said that the employees at the closing Edmonton stores would be offered roles at other stores in the city.