Schultz Pushes Starbucks on US Business Issues


Former Starbucks (NASDAQ:SBUX) CEO Howard Schultz, who departed the coffee giant several months ago, continues to offer insights into the company’s operations, where he served for approximately 25 years across three stints.

In response to Starbucks’ recent disappointing earnings report, Schultz took to his LinkedIn account to express concerns about the company’s US operations, which he views as a significant factor in its decline. He urged executives to prioritize spending time with cafe employees and emphasized the importance of a customer-centric approach at the store level.

Schultz suggested that Starbucks should revamp its mobile ordering and payment app to enhance the customer experience, emphasizing the need for innovation and differentiation in the marketplace, particularly with coffee-centric offerings.

While Schultz stepped down from Starbucks’ board of directors last September and officially left his CEO position in March 2023, he remains one of the company’s largest shareholders.

Current Starbucks CEO Laxman Narasimhan reported a disappointing quarter in the second-quarter earnings, with a decline in same-store sales for the first time since 2020. Sales in the US fell by 3%, contrasting sharply with the 12% growth seen in the same quarter last year. In China, Starbucks’ second-largest market, sales plummeted by 11%.

Starbucks shares have declined by over 20% for the year amidst these challenges.

Narasimhan pledged to implement changes, including updates to the app and mobile payment systems, improvements in service times, and the introduction of revamped menu items to attract customers back to Starbucks stores.

Schultz acknowledged experiencing financial disappointments during his tenure but expressed confidence in Starbucks’ ability to recover, emphasizing the brand’s resilience and innovative history.

Notably, Schultz did not address ongoing negotiations with the Starbucks workers union or the company’s legal case against the National Labor Relations Board.

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