Ex-Starbucks CEO Tells Execs To Spend Time With 'Those Who Wear Green Apron,' Address Growing Problems in U.S.

The former CEO of American coffeehouse chain Starbucks has provided his take on the company's recent failings on home soil.

In a lengthy LinkedIn post, Howard Schultz outlined that Starbucks executives must prioritise coffee itself and their stores. The 70-year-old left his third term as CEO last year after facing fierce criticism for pushing back on unionisation among Starbucks staff.

His recommendations come amidst the coffee chain posting poor results for the recent quarter.

From January to March of this year, revenue fell by two per cent to $8.56 billion, the first time Starbucks experienced a drop since late 2020. Also, adjusted earnings per share fell by eight per cent to $0.68, while the company's stock price decreased by more than 20 percent in the opening months of this year.

For the first quarter of the year, Starbucks' net income was 15 per cent lower than in the same period last year. The organisation's recent downward spiral in the U.S. market has led to the forecast of sales being cut for a second time in 2024.

According to Schultz, Starbucks must fix its operations in the U.S. if it wants to bounce back and improve its company finances.

The 70-year-old believes improving the customer experience is paramount, and the company's senior staff must spend time at the stores "with those who wear the green apron."

He mentioned that focusing on the service aspect will lead to improvement: "The answer does not lie in data but in the stores. One of their first actions should be to reinvent the mobile ordering and payment platform — which Starbucks pioneered — to make once again it the uplifting experience it was designed to be."

In addition to displaying a better in-store experience, Schultz advises Starbucks to remain at the forefront of the coffee market by generating new ideas. He explained: "The go-to-market strategy needs to be overhauled and elevated with coffee-forward innovation that inspires partners and creates differentiation in the marketplace, reinforcing the company's premium position."

Furthermore, the former CEO warned that it would likely take time for Starbucks to turn around its fortunes, and executives would not need to panic and make wholesale changes all at once. He encourages the company leaders to embody its culture of "groundbreaking innovation" and "relentless execution" when taking new steps.

Schultz's assessment will most likely be acknowledged by his successor and present Starbucks CEO, Laxman Narasimhan. Since taking over, the 56-year-old has immersed himself in the heart of the organisation by working half-day shifts as a barista in Starbucks stores.

The current boss has a challenging task ahead, and he was quizzed about the company's poor quarter results in a CNBC interview last week. Narasimhan was suggested to blame the high cost of Starbucks items for the sales decline.

When responding, he alluded to rising inflation levels in the U.S., which were stopping customers from frequently visiting the coffee stores.

Despite the company's struggles, Schultz's successor reassured investors last week on an earnings call that Starbucks has a good chance of succeeding with its latest plans.

Among Narasimhan's ideas is for open pop-up spots across the U.S. to serve specialised coffee drinks, learn about consumer habits and even educate the younger generation about coffee.