The coffee industry is witnessing a significant shift as Peet's Coffee prepares to close more than two dozen locations across its key markets before the month ends. The California-based coffee chain, which has been a fixture in American coffee culture for nearly six decades, is making strategic cuts that signal deeper changes ahead for the brand.
According to local reports, the bulk of these closures—over 24 stores—will hit the San Francisco Bay Area, the very region where Peet's first opened its doors. An additional location in Evanston, Illinois, will also shut down by the end of January. For a company that once prided itself on being a West Coast coffee pioneer, these closures represent more than just a few shuttered storefronts.
The numbers tell a sobering story. Peet's ended 2024 with 255 locations across the United States, according to data from Technomic. That's a decline of 1.2% from the previous year—a figure that might seem modest at first glance. But zoom out further, and the picture becomes clearer: the company operated nearly 400 locations at the end of 2019. In just five years, Peet's has closed roughly 145 stores, representing a contraction of more than a third of its domestic footprint.
In a statement addressing the closures, a company spokesperson acknowledged the difficult nature of the decision while framing it as a necessary step for the future. The closures, they explained, "reflect a broader effort to align our business with long-term growth priorities and current market conditions." The spokesperson expressed gratitude to employees and customers alike, emphasizing that despite the retrenchment, Peet's remains "dedicated to the quality, craftsmanship, and heritage that have defined Peet's for the past 60 years, while embracing new opportunities to innovate and grow."
But these closures aren't happening in a vacuum. They come at a pivotal moment for Peet's corporate ownership structure. Last August, beverage giant Keurig Dr Pepper announced plans to acquire JDE Peets, Peet's parent company, in an all-cash transaction valued at $18 billion. Just last week, Keurig Dr Pepper officially launched its takeover bid, moving the deal closer to completion.
According to Reuters, the acquisition is expected to close in the second quarter of this year. Once finalized, Keurig Dr Pepper has indicated plans to split the combined entity into two separate publicly traded companies—one focused on coffee and another on other beverage categories. This corporate restructuring adds another layer of complexity to Peet's current situation, raising questions about where the coffee chain fits into the new corporate landscape.
The company's history makes these changes particularly poignant. Alfred Peet founded Peet's Coffee in Berkeley, California, in 1966, establishing what many coffee historians consider the birthplace of the American specialty coffee movement. Peet's distinctive dark roasts and European-style brewing methods influenced a generation of coffee entrepreneurs, including the founders of Starbucks, who initially modeled their approach after Peet's.
For decades, Peet's maintained a loyal following, particularly in Northern California, where its shops became neighborhood institutions. The brand represented quality and authenticity at a time when much of American coffee culture still centered around percolators and canned grounds.
The corporate ownership of Peet's has changed hands several times over the years. The most recent major shift came in 2019 when JAB Holding Company, a Luxembourg-based investment firm, combined two of its coffee holdings—Jacobs Douwe Egberts and Peet's—to create JDE Peets. The merged entity expanded beyond the United States to include more than 465 locations across the U.S., China, and the Middle East.
Now, as Keurig Dr Pepper prepares to take the reins, Peet's finds itself at another crossroads. The timing of these store closures just months before the acquisition's expected completion suggests the company is trying to streamline operations and improve its financial position ahead of the transition.
The closures also reflect broader challenges facing the coffee retail industry. The market has become increasingly competitive, with national chains like Starbucks and Dunkin' dominating, while independent coffee shops have carved out their own niches by emphasizing local connections and unique experiences. Caught in the middle, regional chains like Peet's face pressure from both directions.
Consumer habits have shifted as well. The pandemic accelerated trends toward at-home brewing and mobile ordering, changing the role that physical coffee shops play in daily routines. Meanwhile, the rise of premium home brewing equipment and subscription services has given coffee enthusiasts more options than ever to replicate café-quality drinks in their own kitchens.
For the employees affected by these closures, the news comes as a disruption during an already uncertain time in the retail industry. The company has not publicly disclosed how many workers will be impacted or what severance or relocation options might be available.
Long-time customers, particularly in the San Francisco area, are losing familiar gathering spots. These aren't just places to grab a morning coffee—they're community anchors where regulars know each other's names and usual orders, where business meetings happen, and where students camp out with laptops for hours.
The question now is what comes next for Peet's. Will the brand focus on fewer, higher-performing locations? Could there be a shift toward more grocery store presence or packaged coffee sales? Might the company invest more heavily in online ordering and delivery partnerships?
The statement from the company hints at future innovation and growth, but specifics remain unclear. What is clear is that Peet's is entering a new chapter—one that looks considerably different from the Berkeley coffee shop Alfred Peet opened nearly 60 years ago.
As the coffee industry continues to evolve, Peet's story serves as a reminder that even heritage brands with devoted followings must adapt to survive. The closures mark the end of an era for some neighborhoods, but the company insists they're a necessary step toward ensuring Peet's remains viable for decades to come.
Whether this gamble pays off will depend on how successfully Peet's can balance its storied past with the demands of a rapidly changing market. For now, customers at the affected locations have just days left to grab their favorite roast before the doors close for good.
