Shrinking to Grow: The New Discipline in Branch Strategy

Starbucks recently announced plans to close underperforming stores and reallocate capital toward remodeling, new formats, and better-located stores. To the casual observer, it might look like a pullback. But dig deeper, and it’s something smarter: strategic recalibration. They’re not retreating—they’re realigning for how people live, work, and move today.

For years, financial institutions have followed Starbucks’ playbook—branching into high-traffic areas, placing a premium on visibility, and scaling quickly. But the post-pandemic landscape has rewritten the rules of consumer behavior. Remote and hybrid work reshaped foot traffic. Rising costs re-cut unit economics. And market saturation exposed locations that no longer make strategic sense.

That’s why Starbucks is pruning their network, investing in drive-thru formats, optimizing square footage, and doubling down on locations that meet people where they are now—not where they were five years ago.

So what’s the takeaway for your branch network?

• Replace “more” with “fit.” Choose the right markets, right roles, and right branch types based on member behavior—not tradition.
• Treat your network like a portfolio. Prune low performers, relocate to growth corridors, and reinvest in top-quartile branches that drive results.
• Design for today’s journey. Focus on advice-first formats, integrated technology, and frictionless flows that match modern expectations.
• Let data guide capital allocation. Use real performance insights to inform every decision from strategy through build.

If your branch network still reflects pre-2020 assumptions while your members are living in 2026, it’s time to recalibrate. The future of branching isn’t about being everywhere—it’s about being exactly where you should be.