Starbucks Must Fix Customer Experience to Get Back in Coffee Shop Game, Ex-Boss Says

By Jose Resurreccion

May 07, 2024 02:37 AM EDT

Starbucks Must Fix Customer Experience to Get Back in Coffee Shop Game, Ex-Boss Says — Former Starbucks CEO Howard Schultz testifies before the Senate Health, Education, Labor, and Pensions Committee in the Dirksen Senate Office Building on Capitol Hill on March 29, 2023 in Washington, DC. The Committee will be discussing the formation of unions at Starbucks stores across the country and hear from witnesses who have allegedly been fired for their efforts to organize unions.
(Photo : Anna Moneymaker/Getty Images)

Former Starbucks CEO Howard Schultz urged his successor and the rest of the company's management to renew its focus on the coffee drinks it offers customers to undo its financial losses.

Schultz published a post on LinkedIn over the weekend, in which he revealed that he was approached by people after the coffee shop giant dropped 2% in its recent quarterly revenue report due to declining store traffic worldwide.

Howard Schultz Still Concerned with Starbucks After Exit

This marked the first time since 2020 that the company reported a decrease in its profits, according to AP News.

In the LinkedIn article, he also wrote that while he has had "no formal role within the company" since April, he still wanted to reach out to those who wear its iconic green apron. He urged senior leaders and board members to spend some time talking to store baristas and cooperating with them on how to improve their coffee servings to customers.

Despite no longer being connected with Starbucks, Schultz remains its largest individual shareholder, worth $1.5 billion at the end of 2023.

He was also optimistic that its operations in China would bounce back, but he insisted that its operations in the United States should be fixed first.

Schultz was credited with transforming Starbucks from a local Seattle coffee store into a global brand after he bought the company in 1987.

Starbucks has experienced conflict between store employees who want to unionize and Schultz, who decertified the union at its six stores as one of his first acts as CEO.

Since then, he had a history of intervening with the company whenever he thought it was struggling.

CNN said Schultz first retired as CEO in 2000 to become its chairman, only to return to the job in 2008 when Starbucks was dealing with the recession.

He retired again in 2017 but returned in 2022 after his successor, Kevin Johnson, retired after 13 years in the firm.

Schultz left the company's board late last year and became chairman emeritus. In 2022, Schultz told CNBC that he does not plan to return as Starbucks's top boss again.

New Starbucks Boss Urged to Focus on Coffee

According to the Associated Press, Schultz named former PepsiCo executive Laxman Narasimhan his replacement last March. Narasimhan previously said he was planning to work a half-day shift once a month in one of its stores to stay close to its culture and connect with its customers.

However, Schultz provided unsolicited advice to Narasimhan in the LinkedIn post, urging the new Starbucks CEO to reinforce the firm's premium positioning by focusing on how they serve coffee.

In response, Starbucks said in a statement Monday (May 6) that he appreciated Schultz's perspective and assured him that "the challenges and opportunities he highlights are the ones [they] are focused on."

Starbucks's shares are down by over 20% this year. CNN reported that the company is also undergoing negotiations with the Starbucks workers union and has a Supreme Court case against the National Labor Relations Board.