There are a few cities that have become poster children for the lingering economic aftershocks of the Covid pandemic.
Upscale shopping districts and downtown streets once crowded with locals and visitors from every corner of the globe now seem emptier with each passing day.
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The “woe is us” refrain is the same in New Orleans, Portland, Ore., and San Francisco.
But San Francisco seems to be facing the worst of it as dozens of beloved local shops have shuttered, national chains have retreated, and a smattering of new businesses are all but lost amid a swirl of high rents, theft, and dwindling foot traffic.
Office towers still have plenty of vacancy, too, a worrying sign of a post-pandemic rhythm that refuses to pick up.
Now comes the latest blow: Starbucks has shut down another San Francisco location.
Image source: Shutterstock-Sorbis
Starbucks shutters a San Francisco Financial District fixture
On August 1, 2025, after nearly two decades of serving downtown’s morning commuters and leisurely afternoons, the Starbucks at 295 California Street closed its doors.
The company confirmed the closure coincided with the natural end of the lease, saying that employees were offered relocations to nearby stores, according to SF Gate.
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The Financial District closing is just the latest in a string: Since November 2024, at least six Starbucks locations have been shuttered across the city, with four closing so far in 2025.
Back in 2023, Starbucks operated 59 stores in San Francisco, a number that has since dwindled to around 35 by August 2025.
Several factors are colliding: climbing labor costs — especially after California’s fast-food minimum wage rose to $20/hour in April 2024; softening consumer demand; sluggish post-pandemic recovery; and persistent pressure to streamline underperforming locations.
Related: Starbucks’ problems may be too big to fix
The domino effect stretches beyond coffee. Retailers like Walgreens, Macy’s, Whole Foods, and Nordstrom are cutting back or closing stores in San Francisco amid a tangled web of rising operating costs, theft, and thin margins.
Starbucks has said the closures are part of a broader strategic pivot.
The company is phasing out its “pickup-only” format — small locations where orders are placed via app instead of at the counter — across the U.S. by the end of 2026, calling the model “overly transactional” and lacking the warmth of traditional cafés.
Some locations may be converted to regular Starbucks locations and some will close for good.
Starbucks closure may offer opportunity
Real estate experts suggest the chain may be consolidating stores that cannibalized one another’s business, according to a report in the San Francisco Standard.
The California Street location was part of many San Franciscans’ daily grind for almost 20 years, and it will leave them searching for a new go-to spot every morning, so there’s also opportunity amid the cosings.
Some customers may lament the loss of Starbucks, just as others hope for a small business to take its place.
Independent coffee spots may fill the void and may have a better chance for success, since the rents could be lower than they have been in years. There’s also opportunity for mom-and-pop cafés, artisanal roasters and neighborhood bakeries – all of which give any city its own flavor.
Related: Starbucks plans major change to how it adds new menu items
