Starbucks founder Howard Schultz believes the company should refocus on coffee and spend more time in stores as sales struggle.
Driving the news: After weak quarterly sales and earnings, Schultz received feedback from people concerned about Starbucks’ performance. The Seattle-based coffee giant experienced a 2% drop in revenue in the January-March period, the first quarterly revenue decrease since 2020.
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- Schultz, the former CEO who grew Starbucks into a global behemoth, emphasized that senior leaders and board members should spend more time talking to baristas to improve customer experience.
- Schultz questioned the effectiveness of CEO Laxman Narasimhan’s turnaround plans, noting that coffee is what differentiates Starbucks and reinforces its premium positioning.
- Narasimhan has mentioned new product releases, including boba drinks, sugar-free options, and the brand’s first energy beverage, as potential drivers of future store traffic.
What they’re saying: Schultz suggested that Starbucks should update its mobile ordering and payment platform to enhance the customer experience, but he did not specify the changes he thinks should be made.
- Starbucks responded to Schultz’s perspective, stating that they appreciate the challenges and opportunities he highlights and express confidence in the company’s long-term success.
- Schultz has a history of intervening when Starbucks faces challenges, having served as CEO twice before and currently holding the position of chairman emeritus.
- Starbucks’ stock price has fallen over 20 percent since the beginning of this year.
