Former Starbucks CEO Howard Schultz published a lengthy article on LinkedIn urging the coffee chain to overhaul its US operations after the company posted disappointing quarterly earnings.
Schultz, who stepped down from the company’s board last fall and became the public face of the company’s opposition to unionization by its employees, wrote on Sunday that Starbucks “must regain an obsessive focus on the customer experience from a merchant’s perspective.” “
“The answer is not in the data, but in the stores.”
Schultz said its lagging US sales – this Starbucks shares fell 16% during the trading session Last week – “Primary cause of company’s fall from grace.”
In her LinkedIn post, Schultz encouraged Starbucks executives and board members to “spend more time with the green armband.”
“One of their first moves was to reinvent the mobile ordering and payment platform that Starbucks pioneered — to make it a one-stop-shop experience,” Schultz wrote.
The 70-year-old former boss, who remains one of the company’s largest shareholders, stepped down from the company’s board of directors last September – six months after the company was handed over to CEO Laxman Narasimhan.
The Brooklyn native, who bought Starbucks when it was a local Seattle-based coffee bean shop and turned it into a chain of European-style coffeehouses, urged the company to redo its “go-to-market strategy” by “focusing on coffee. A visionary innovation that inspires partners.”
“In all things, focus on the experience, not the transaction,” Schultz wrote.
Narasimhan was asked by CNBC analyst Jim Cramer during a tense interview last week when the chief executive was asked to explain Starbucks’ lackluster quarterly results.
“Can your coffee be too expensive?” Kramer asked the Starbucks boss during the interview — a video of which went viral on social media.
Narasimhan replied that the “occasional American customer” has “clearly reduced visits to us” due to high levels of inflation.
“We couldn’t convey to them the value we were providing,” the CEO said.
Narasimhan promised to “achieve” the “action plan”. [customers] Let them know the value we offer.
After the interview, Cramer told CNBC’s “Squawk Box” that he was “stunned.”
“I am saddened by this situation knowing that Narasimhan has a plan of action.” Cramer said on CNBC.
Shares of Starbucks hit a two-year low on Wednesday after the company cut its annual forecasts due to weak demand in the inflation-hit U.S. and a slower-than-expected recovery in China.
“We had a tough quarter. We have to do better, and we will. Looking forward, I believe we have the right strategy,” Narasimhan told investors on an earnings call last week.
Starbucks cut its sales outlook for the second time this year. It reported last week that its net income for the quarter fell 15% compared to the same period last year.
The company also reported a 2% decline in revenue.
This post asked Starbucks for comment.
