Starbucks to close 500 more shops

The froth has come off Starbucks in recent months

Coffee chain Starbucks plans to shut 500 stores in the US on top of the 100 closures it had already announced.

Up to 12,000 full and part-time jobs will go, although Starbucks will try to move staff into other stores.

While it is closing underperforming stores, the company is still opening new US outlets, although it is cutting back from 250 to 200 next year.

Starbucks opened many stores in areas which have since been hard-hit by the housing slump such as Florida.

Feeling the pinch

About 70% of the outlets scheduled to be closed have only been open since 2006.

The company has been hard-hit by US consumers feeling the pinch and cutting back on their spending on expensive coffee.

It is disrupting the lives of the people who have worked so hard to deliver superior service to our customers Howard Schultz, Starbucks chief executive See Starbucks shares

The job losses would be about 7% of the company's global workforce.

Starbucks said it was closing stores that were either not profitable or likely to struggle in the future as economic conditions deteriorate.

"This makes our decision to close stores difficult because it is disrupting the lives of the people who have worked so hard to deliver superior service to our customers," said chief executive Howard Schultz.

"At the same time, we recognise that it is necessary to make decisions that will strengthen the US store portfolio."

Starbucks shares were trading up more than 1% on Nasdaq on Wednesday morning.