Howard Schultz Urges Starbucks to Revitalize American Operations


Former Starbucks(NASDAQ:SBUX) CEO Howard Schultz, despite stepping down several months ago, continues to provide insights into the company he led for approximately 25 years over three separate periods.

In response to Starbucks’ recent disappointing earnings report, Schultz took to his LinkedIn account to express concerns about the chain’s performance in the United States, which he views as the primary factor contributing to its decline. He advised executives to prioritize spending time with cafe employees, emphasizing the importance of a customer-centric approach.

Schultz proposed a reinvention of the mobile ordering and payment system to restore its initial positive impact. Additionally, he suggested a strategic shift towards coffee-centric innovations to reinforce Starbucks’ premium positioning in the market.

Although Schultz departed from Starbucks’ board of directors last September, he remains one of its largest shareholders. The current CEO, Laxman Narasimhan, acknowledged a disappointing quarter in Starbucks’ recent earnings report, marked by a decline in same-store sales for the first time since 2020.

Sales in the United States dropped by 3%, contrasting sharply with the previous year’s 12% growth. In China, Starbucks’ second-largest market, sales plummeted by 11%. Consequently, Starbucks’ shares have declined by over 20% this year.

Narasimhan outlined plans to revitalize the business, focusing on app updates, service improvements, and menu enhancements to attract customers back.

Schultz acknowledged experiencing financial disappointments during his tenure but expressed confidence in Starbucks’ resilience. He stressed the need for contrition and renewed focus on core principles to facilitate recovery.

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