Starbucks closes San Jose stores as competitor moves in

As one coffee giant shutters multiple locations in San Jose, another company is moving in.

Four Starbucks locations in San Jose have closed, following the company announcing it would shutter 1% of its stores across North America. Two other locations in Mountain View and one each in Cupertino, Santa Clara and Milpitas have also closed. The company laid off 900 corporate, non-retail employees and has 18,300 stores left across the U.S. and Canada. It’s unclear how many retail workers have been affected by the closures.

Meanwhile, Dutch Bros, a drive-thru coffee shop chain, has submitted a proposal to bring its colorful refreshers and sugary coffee drinks to 2624 S. Bascom Ave. in San Jose near one of the closed Starbucks locations. A Dutch Bros location recently opened in Gilroy, with the proposed 2,536-square-foot San Jose location still under review. The company has more than 1,000 locations across 19 states, including more than 200 in California.

Dutch Bros representatives did not respond to a request for comment.

Starbucks’ sales in North America have declined 2% from the previous quarter due to a decrease in people ordering drinks, according to the company’s most recent quarterly report. It plans to expand locations next year and is still renovating 1,000 of its coffee shops to give it a more homey feel.

“During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance,” Starbucks CEO Brian Niccol wrote in a statement.

Niccols wrote that employees working at shuttered locations would either be transferred to another location or given a severance package.

Starbucks workers at the Hamilton Plaza location in Campbell said they’ve already seen an influx of customers from the shuttered San Jose storefront down the street on South Bascom Avenue. Two workers from the San Jose location transferred there, an employee at the Campbell location said.

“I think (the closing of locations is) unfortunate to the community,” barista Grace Ward told San José Spotlight. “We’ve definitely seen a big influx here of people that used to go to that Starbucks that are disappointed because it’s closed now. This Starbucks and that Starbucks are quite different. That (one) was like a small, cute little store. So it’s definitely different for the regulars that aren’t used to this store.”

Sarah Cody, a regular at the closed San Jose Starbucks location on South Bascom Avenue, said she was surprised to see it had shuttered with no advance warning when she swung by on Monday. She still needed her large cold brew, so she drove a few minutes to the Campbell location. The San Jose location was closer to her workplace, but she said she would’ve chosen a different coffee shop if there wasn’t another Starbucks nearby.

“I probably would’ve gone to Peet’s,” Cody told San José Spotlight.
Mike and Daniel, who declined to give their last names, prefer the Campbell location over the shuttered San Jose one. It’s bigger, has more seating and they like the baristas. They have met there every week for the past year, order large Frappuccinos and catch up on everything going on in their lives.

The cost of their regular drink has gone up about a dollar since last year, Daniel said, but they will continue to come to Starbucks. President Donald Trump’s 50% tariff on Brazil, which produces a large portion of the world’s coffee, has impacted the company’s stocks and passed costs on to customers.

“Everybody’s cutting back right now. Walmart’s cutting back, Target’s cutting back,” Daniel told San José Spotlight. “In the time that we’re living in 2025, this is (the) reality.”

Contact Joyce Chu at [email protected] or @joyce_speaks on X.