Starbucks closing all 379 Teavana stores
NEW YORK — Starbucks is closing down its struggling Teavana chain and plans to rely on customers spending more on pricier drinks and food to grow sales at its namesake coffee stores.
The company reported disappointing global sales growth on Thursday, and said it will close all 379 Teavana locations over the coming year. It had acquired the U.S. mall-based chain in 2012, with then-CEO Howard Schultz citing the huge potential for the tea market. But in April, the company said it was reviewing options for the chain.
Starbucks (SBUX) CEO Kevin Johnson on Thursday noted declining foot traffic at malls.
“We felt it was an appropriate time to take the decision and begin shutting down those stores,” he said.
The announcement came as Starbucks said global sales at its flagship chain rose 4 percent at established locations for the quarter ended July 2. Higher average spending per visit fueled the growth. In the U.S., sales rose 5 percent at established locations, also driven mostly by higher spending versus an increase in customer visits.
Competition has intensified in the U.S. restaurant industry, making it challenging for chains to get customers to visit their stores more often. Dunkin’ Donuts said earlier in the day that customer traffic fell again at its established U.S. locations. McDonald’s, meanwhile, has been promoting $1 sodas and $2 McCafe smoothies, frappes and shakes, a strategy the burger chain says helped bring in customers during the second quarter.
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