Starbucks Founder Schultz Says Company Needs to Refocus on Coffee as Sales Struggle

Former Starbucks CEO Howard Schultz has urged the company’s leaders to focus on coffee drinks and store traffic as they work to turn around declining sales. Starbucks reported a 2% drop in revenue in the January-March period, the first time since 2020 that the company saw a drop in quarterly revenue. Schultz, who bought Starbucks in 1987, is credited with growing the company into a global behemoth with nearly 39,000 stores worldwide. He remains Starbucks’ largest individual shareholder, holding shares valued at $1.5 billion at the end of last year.

Schultz believes senior leaders should spend more time talking to baristas in the company’s stores and emphasizes that the company’s fix needs to begin at home. Starbucks’ U.S. operations are the primary reason for the company’s fall from grace, and the answer lies not in data but in the stores. Starbucks’ new CEO, Laxman Narasimhan, has been working a half-day shift in Starbucks stores once a month. Schultz believes coffee is what differentiates Starbucks and reinforces the company’s premium positioning.

Narasimhan announced plans for coffee pop-up stores in the U.S. and elsewhere last month, using the stores to experiment with limited-edition coffee drinks, teach younger customers about coffee, and learn about customers’ preferences. Schultz also said the company should update its mobile ordering and payment platform to “once again make it the uplifting experience it was designed to be.” Starbucks is accelerating the introduction of new digital features and trying to personalize the customer experience within its app.

Schultz has a history of stepping in when he sees Starbucks struggling, retiring as CEO in 2000 and becoming the company’s chairman. He stepped down again in 2017 but returned to lead the company temporarily in 2022.

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