Howard Schultz, the former CEO and founder of Starbucks, has recently shared his thoughts on how the company can turn around its flagging sales.
In a LinkedIn post published over the weekend, Schultz emphasized the need for Starbucks leaders to spend more time in stores and focus on coffee drinks to improve the company’s performance.
Starbucks reported weaker-than-expected quarterly sales and earnings last week, with revenue dropping 2% in the January-March period due to slowing store traffic worldwide. This was the first time since 2020 that the company experienced a quarterly revenue decline, and as a result, Starbucks lowered its sales and earnings guidance for the full fiscal year.
Schultz, who is credited with growing Starbucks into the global behemoth it is today, believes that senior leaders, including board members, should spend more time talking to baristas in the company’s stores. He stressed that the company’s fix needs to begin with U.S. operations, which he identified as the primary reason for Starbucks’ fall from grace.
The former CEO also seemed to question some of the turnaround plans announced by current CEO Laxman Narasimhan, who mentioned several new products, such as boba drinks, sugar-free options, and the brand’s first energy beverage, as potential drivers of customer traffic. Schultz, however, emphasized that coffee is what differentiates Starbucks and reinforces the company’s premium positioning, suggesting that the go-to-market strategy needs to be overhauled and elevated with coffee-forward innovation.
Schultz also called for updates to Starbucks’ mobile ordering and payment platform to make it a more uplifting experience for customers. While Narasimhan has announced plans for coffee pop-up stores and the acceleration of new digital features, Schultz did not specify the changes he thinks should be made.
Starbucks responded to Schultz’s post, stating that they appreciate his perspective and are focused on addressing the challenges and opportunities he highlighted.
The company remains confident in its long-term success, despite its stock price having fallen more than 20% since the start of the year.
The Associated Press contributed to this article.