Ex Starbucks CEO says stores must be ‘overhauled’ after slump in sales and warns ‘there are no quick fixes’
THE former CEO of Starbucks has said the coffee chain must "overhaul" its stores if it wants to remain competitive.
Howard Schultz, who served as CEO for over 25 years, spoke out amid the company's significant slump in sales.
Schultz gave his former employer his two cents after the company shocked investors with a decline in same-store sales during its latest quarter.
Writing in a LinkedIn post, the enigmatic ex-CEO said Starbucks leaders ought to connect with regular employees and understand how stores are serving customers.
"Senior leaders - including board members - need to spend more time with those who wear the green apron," he wrote.
"One of their first actions should be to reinvent the mobile ordering and payment platform - which Starbucks pioneered - to once again make it the uplifting experience it was designed to be."
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Schultz also said the company needs to keep inventing new beverages and find ways to stand out from competitors.
"The go-to-market strategy needs to be overhauled and elevated with coffee-forward innovation that inspires partners and creates differentiation in the marketplace, reinforcing the company’s premium position.
"Through it all, focus on being experiential, not transactional."
Schultz added that "there are no quick fixes" and urged leaders at Starbucks not to do anything drastic too fast.
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Senior leaders - including board members - need to spend more time with those who wear the green apron
Howard Schultz
"There is a natural tendency to try to do too much too soon," he said.
"Don’t try to do everything at once."
STARBUCKS DISSAPOINTMENT
Schultz is not the only one who was disappointed by the figures reported during Starbucks' latest earnings call.
CFO Rachel Ruggeri blamed the loss in profits on "occasional customers" pulling back on spending.
She said Starbucks will prioritize speeding up service, adding discounts, and introducing new products.
Food will also be used to attract more customers outside of peak morning hours.
WHO IS SCHULTZ?
Schultz served two terms as Starbucks CEO, from 1986 to 2000, and 2008 to 2017.
He came back in 2022 and served as interim CEO for one year as the title was handed over to Laxman Narasimhan.
During his early years, Schultz was the one who convinced Starbucks bosses to begin using espresso machines at stores, which was unusual for American cafes at the time.
He led the company's nationwide expansion in the late 80s and early 90s, taking Starbucks public in 1992.
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