Starbucks closing 35+ stores in Canada — including busy, legacy locations

Starbucks said the cuts targeted underperforming coffeehouses. So what gives? What does “underperforming” mean when the list includes a café that opened less than a year ago and a legacy location that had been around since the turn of the millennium in a bustling area? And if you worked at — or relied on — one of these stores, what should you do now?

How many Starbucks stores are closing in Canada?

Starbucks Corporation, the Seattle-based chain with more than 18,000 coffeehouses in the U.S. and Canada, told investors on Sept. 24 that it would close roughly 250 North American stores, or about 1% of its footprint, in a filing with the U.S. Securities and Exchange Commission (SEC).

It has not provided a list of Canadian closures, which led 6ix Retail to build its own. 6ix Retail flagged stores whose listings on the Starbucks online store locator showed regular hours through Sept. 26 and “Closed” every day after. The publication then confirmed the downtown Toronto closures in person.

Because a listing can also go dark for a temporary closure, treat the tally as a working count: 12 closures in Ontario, 10 in Quebec, 10 in British Columbia, four in Alberta and one in New Brunswick. The full list of closures stretches from Toronto, Ottawa and Montreal to Merritt, B.C., and Miramichi, N.B. Toronto alone has lost 46 Starbucks locations since 2021.

Why would Starbucks close a busy store?

In its filing, Starbucks said the stores being cut were chosen because they don’t deliver the coffeehouse experience and financial performance it expects. In a letter to employees, chief operating officer Mike Grams wrote that while most locations are benefiting from the company’s turnaround, ”some coffeehouses continue to underperform.”

Foot traffic is only one part of the equation. Of the roughly US$300 million (C$427 million) in restructuring charges Starbucks expects, about US$200 million is cash tied primarily to lease exits and employee separation benefits. That suggests occupancy costs are part of the math, though the company hasn’t said how it weighed any single store. Starbucks is also banking on some customers simply moving to nearby locations.

Money.ca asked Starbucks how it defines an underperforming store, why it closed busy downtown locations such as 350 Bay St., 485 Church St. and 885 Dunsmuir St., and whether affected employees are being offered transfers. In an emailed statement, Mary Franssen, senior manager of Canada corporate communications at Starbucks, said the company reviews each coffeehouse individually "using a range of factors, including customer experience and long-term performance."

"These decisions concern individual coffeehouse locations, not a withdrawal from communities or markets," Franssen said, adding that in many cases customers "will continue to have access to another nearby Starbucks coffeehouse." The statement did not address the specific locations Money.ca asked about.

What are laid-off Starbucks workers owed?

Starbucks said in a letter to employees that it would move staff to other stores where possible and offer severance support where it couldn't. Franssen told Money.ca that transfer opportunities are "reviewed based on local availability and business needs." For staff who can't be placed, she said, the company's severance package includes a minimum of three weeks' pay, six months of access to its Employee Assistance Program and extended health or dental coverage for those enrolled in benefits, including up to CA$5,000 in mental health benefits. During last year's closures, many Toronto staff got just two days' notice.

If you aren’t placed, provincial law sets the minimum amount you can expect to receive. In Ontario, workers with at least three months on the job are generally entitled to written notice or pay in lieu: one week for under a year, two weeks for 1 to 3 years, up to eight weeks for eight years or more, according to Steps to Justice, a legal-information site from the non-profit Community Legal Education Ontario (CLEO).

Long-tenured staff may be owed more. Ontario’s Employment Standards Act (ESA) requires severance pay of up to 26 weeks for employees with five or more years of service when the employer’s global payroll is at least $2.5 million — on top of termination pay. These are floors, not ceilings, and rules differ depending on what province you live in.

On the federal level, apply for Employment Insurance (EI) as soon as your job ends. You don’t need your Record of Employment (ROE) first, and waiting more than four weeks after your last day could cost you benefits.