Starbucks (NASDAQ:SBUX) co-founder Howard Schultz has urged the coffee giant to refocus its efforts on its core product amidst a period of declining sales. Following a recent report of disappointing quarterly sales and earnings, Schultz took to LinkedIn to express his concerns and suggestions.
Noting a decline in revenue for the first time since 2020, Schultz emphasized the necessity for company leaders, including board members, to spend more time engaging directly with baristas in stores. He stressed the importance of prioritizing the customer experience and reiterating Starbucks’ commitment to quality coffee.
Laxman Narasimhan, Starbucks’ current CEO, has taken steps to immerse himself in store operations, working regular shifts to better understand the challenges and opportunities facing the company on the ground. However, Schultz hinted at reservations regarding Narasimhan’s plans for product diversification, advocating instead for a renewed focus on coffee-centric innovations.
While Narasimhan has proposed new offerings such as boba drinks and sugar-free options, Schultz believes that Starbucks’ unique selling proposition lies in its coffee offerings, which should remain central to the company’s strategy. He suggested revamping the go-to-market approach to prioritize coffee-forward innovation.
In addition to product strategy, Schultz emphasized the need to enhance Starbucks’ digital ordering and payment platform to recapture the uplifting experience it was designed to deliver. While Narasimhan has previously spoken about enhancing digital features and personalizing the customer experience, Schultz’s input underscores the importance of revitalizing these efforts.
Starbucks responded to Schultz’s remarks by expressing appreciation for his perspective and reaffirming confidence in the company’s long-term success. Schultz himself has a history of intervening during challenging times for Starbucks, having previously returned to lead the company amidst economic downturns.
Despite Schultz’s interventions, Starbucks’ stock price has experienced a decline of over 20% since the beginning of the year, reflecting investor concerns about the company’s performance in the face of evolving consumer preferences and competitive pressures.
Featured Image: Freepik
