Former CEO Howard Schultz on How Starbucks Stores Need A Revamp

Starbucks at Night (Credits: Starbucks)

On Sunday, former Starbucks CEO Howard Schultz shared his insights on the coffee giant’s disappointing quarterly report, expressing optimism about its recovery potential through enhancements to its U.S. stores.

Though Schultz no longer holds an official position at Starbucks, he emphasized the need for refining the mobile order and pay experience and revamping drink innovation towards premium offerings to differentiate the brand.

“The stores require a maniacal focus on the customer experience, through the eyes of a merchant. The answer does not lie in data, but in the stores,” Schultz articulated in a LinkedIn post on Sunday.

Howard Schultz (Credits: Jason Redmond/AFP/Getty Images)

Starbucks responded to Schultz’s input with appreciation, acknowledging alignment with the company’s ongoing focus on highlighted challenges and opportunities.

“The challenges and opportunities he highlights are the ones we are focused on. And like Howard, we are confident in Starbucks long-term success,” Starbucks conveyed in a statement.

Following the unexpected decline in same-store sales leading to a full-year forecast reduction, Starbucks shares plummeted by 17%, diminishing its market value to $82.8 billion.

Analysts, grappling with the chain’s underperformance, speculate on factors contributing to a 7% decrease in U.S. traffic during the quarter.

Howard Schultz (Credits: Getty Images)

Bank of America Securities analyst Sara Senatore suggested lingering effects of social media backlash concerning the company’s stance on Middle Eastern conflict as a potential factor.

Schultz, renowned for transforming Starbucks into an industry titan, relinquished his CEO role over a year ago, passing the baton to Laxman Narasimhan, formerly CEO of Reckitt, the parent company of Lysol. Schultz also exited the Starbucks board last year.

Offering implicit guidance to his successor amidst efforts to bolster sales, Schultz underscored the importance of leaders embodying both humility and confidence to rebuild trust and enhance organizational performance.

“A year and a half ago, Schultz told that he does not plan to come back as Starbucks’ chief executive again.”

Jessica Smith
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