Former Starbucks CEO and founder Howard Schultz has shared his thoughts on how the company can turn around its flagging sales. In a LinkedIn post, Schultz emphasized the importance of Starbucks leaders spending more time in stores and focusing on coffee drinks. He believes that the company’s fix should start with its U.S. operations, which have been a primary factor in its recent decline. Schultz, who is the largest individual shareholder in Starbucks, has called for a renewed emphasis on the customer experience and a return to a more coffee-centric approach.
Laxman Narasimhan, who took over as Starbucks CEO last spring, has been working shifts in stores to better understand the operations. However, Schultz seemed to question some of Narasimhan’s plans for turning the company around, particularly new product offerings like boba drinks and sugar-free options. Schultz believes that coffee is what sets Starbucks apart and that the company should focus on innovative coffee offerings to maintain its premium positioning in the market. Narasimhan did announce plans for coffee pop-up stores to experiment with limited-edition drinks and engage younger customers.
One of Schultz’s key recommendations is to update Starbucks’ mobile ordering and payment platform to enhance the customer experience. He believes that the platform should be revamped to provide a more uplifting experience for customers. Narasimhan had previously mentioned that Starbucks is accelerating the introduction of new digital features and personalizing the customer experience within its app. Schultz’s suggestions come as Starbucks reported a drop in quarterly revenue for the first time since 2020, leading to a decrease in the company’s stock price by more than 20% since the beginning of the year.
Schultz has a history of stepping in when Starbucks faces challenges, having returned as CEO in 2008 during the recession and led the company on a temporary basis in 2022. In 2023, he appointed Narasimhan as CEO and later stepped down from the board to become chairman emeritus. Despite his retirement from active leadership roles, Schultz continues to share his perspectives on the company’s direction and remains invested in its long-term success. Starbucks responded to Schultz’s comments by stating that they appreciate his perspective and are focused on addressing the challenges and opportunities highlighted by him.
Overall, Schultz’s recommendations for Starbucks to focus on the customer experience, elevate its go-to-market strategy with coffee-forward innovation, and update its digital platform reflect his belief in the company’s potential for long-term success. As Starbucks works to navigate a challenging market environment and regain its competitive edge, Schultz’s insights from his years of experience at the company offer valuable guidance for its future strategic direction. With a renewed emphasis on its core coffee offerings and enhancing the overall customer experience, Starbucks aims to regain its momentum and drive sustainable growth in the years ahead.
