Former Starbucks CEO Howard Schultz continues to offer critiques of the company he led for 25 years, following the release of disappointing earnings. In a LinkedIn post, he emphasized the importance of focusing on the customer experience in stores rather than relying on data. Schultz suggested that Starbucks reinvent its mobile ordering and payment systems to improve the overall experience. He also called for coffee-forward innovation to elevate the company’s strategy and maintain its premium position in the marketplace.
Schultz stepped down from Starbucks’ board of directors in September, completing his exit in March 2023. He remains one of the company’s largest shareholders and continues to provide his insights on Starbucks’ operations. Current CEO Laxman Narasimhan, whom Schultz helped select, reported a disappointing quarter, with same-store sales in the US and China experiencing declines. Narasimhan aims to turn the business around by updating the app, improving service times, and introducing new menu items to attract customers.
The decline in same-store sales in the US and China has resulted in Starbucks’ stock falling more than 20% this year. Despite facing financial disappointments during his tenure, Schultz expressed confidence in Starbucks’ ability to recover, emphasizing the brand’s resilience and unique position in the industry. He called for renewed focus, discipline, and contrition to overcome the challenges the company is currently facing, acknowledging that it is not business as usual for Starbucks.
Narasimhan has pledged to implement changes to the company’s app and payment systems to enhance the customer experience and increase sales. He also plans to introduce new menu items and improve service efficiency to attract customers back to Starbucks locations. While Schultz did not address the ongoing negotiations with the Starbucks workers union or the company’s case with the National Labor Relations Board, he remains focused on the need for Starbucks to adapt and innovate to regain its lost momentum.
In his reflections on Starbucks’ recent performance, Schultz highlighted the importance of focusing on stores and the customer experience to drive growth. He also stressed the need for Starbucks to differentiate itself in a competitive market by emphasizing coffee-forward innovation. Despite the challenges the company faces, Schultz expressed confidence in Starbucks’ resilience and ability to recover, emphasizing the need for contrition and renewed focus to overcome the current difficulties. As Starbucks navigates a challenging period, both Schultz and Narasimhan are committed to implementing changes to improve the company’s performance and restore its position in the market.
