Even though Howard Schultz departed from his role as CEO of Starbucks several months ago, he continues to provide criticisms of the company he led for approximately 25 years across three separate terms.
In response to Starbucks’ disappointing earnings report, Schultz took to his LinkedIn profile to address inquiries from both internal and external sources regarding the company’s struggles, particularly in its US operations. He urged executives to devote more attention to engaging with cafe employees, emphasizing the crucial importance of fostering an exceptional customer experience within the stores.
Schultz emphasized that the key to addressing these challenges lies not in analyzing data, but rather in prioritizing the in-store experience and adopting a merchant’s perspective.
He recommended that Starbucks overhaul its mobile ordering and payment app to restore it to its original uplifting purpose. Additionally, he hinted at the need for Starbucks to enhance its strategy with innovative coffee-centric approaches, implying that recent offerings like spicy drinks might not be sufficient.
Schultz, who departed from Starbucks’ board in September and as CEO in March 2023, continues to be a significant shareholder. The current CEO, Laxman Narasimhan, appointed with Schultz’s support, described the recent quarter’s earnings as disappointing. Starbucks reported a decline in same-store sales for the first time since 2020 and revised its full-year sales forecast downwards.
Same-store sales declined by 3% in the United States, marking a significant shift from the 12% growth experienced in the same quarter the previous year. In China, which stands as the chain’s second-largest market, sales plummeted by a staggering 11%.
Year-to-date, Starbucks (SBUX) shares have dropped by over 20%.
Narasimhan has committed to revitalizing the business by implementing updates to its app and enhancing mobile and payment offerings, as well as striving to improve service times and introducing revamped menu items to entice customers back.
In his letter, Schultz acknowledged experiencing financial disappointments during his tenure, emphasizing the necessity for contrition and a renewed focus and discipline on the core aspects of any company that experiences significant setbacks.
“I have no doubt that Starbucks will bounce back. After all, Starbucks pioneered an entire industry,” he remarked. “The brand has shown remarkable resilience, but it’s evident that things aren’t operating in the usual manner.”
Schultz didn’t address the company’s current talks with the Starbucks workers union or its Supreme Court case against the National Labor Relations Board.
Read More: The Buzz Behind Thousands of Starbucks Workers Striking on Red Cup Day
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