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Starbucks: A store closing near you?

There was a recent announcement that Starbucks will close 600 under-performing stores resulting in lay-offs of about 12,000 employees. The impending lay-offs and store closings really come as no surprise but probably not for the reason you make think.

Rising fuels costs and the resulting increased operating overhead do play a role but the real culprit is management. They drifted away from the company's evaluation formula when opening new stores and chose to open stores to close to existing stores and in areas that could not produce sufficient sales.

Things had gotten so bad that Starbucks had to bring back CEO Howard Schultz to turn the company around. Schultz is already implementing plans but those plans will not preclude the store closings.

Not knowing if your Starbucks store is on the list to be closed is all the more frustrating but announcements should be made mid-July.

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