LAS VEGAS, NEV. — Former Starbucks CEO Howard Schultz expressed his excitement on Wednesday, stating that he did a cartwheel in his living room when current CEO Brian Niccol introduced his "back to Starbucks" strategy. Schultz's enthusiasm serves as a significant endorsement for Niccol as he endeavors to rejuvenate the company's slumping sales and restore the beloved Starbucks culture.
Schultz, who transformed Starbucks from a modest chain into a global coffee powerhouse, made a surprise appearance at the company's Leadership Experience event in Las Vegas. This three-day gathering attracted over 14,000 North American store leaders, who came to hear from Starbucks management as the company embarks on a crucial turnaround. Niccol assumed the CEO position in September after the board ousted Laxman Narasimhan, Schultz's chosen successor.
Following a challenging start to the year, Starbucks shares have surged nearly 20% since April, currently trading at approximately $95.30—just shy of their closing price on August 13, after a remarkable 25% increase on the day Niccol was appointed CEO. Although Schultz returned in 2022 for his third stint as CEO, it was a temporary role, and he has confirmed to CNBC that he has no intentions of returning permanently.
While Schultz no longer holds an official position within Starbucks, he retains the right to attend board meetings unless barred by the company's directors. During Niccol's first week in office, he outlined his plans for a company comeback in an open letter, expressing a commitment to returning to the core values of Starbucks.
In the months that followed, Starbucks revealed further details on its strategy to reconnect with its roots, including the return of seating inside cafes and the initiative to personalize messages on cups. Under Niccol's guidance, the company's marketing approach has pivoted to emphasize its coffee offerings instead of relying on discounts and promotions.
When Starbucks announced Narasimhan's dismissal and Niccol's appointment, Schultz voiced his support, asserting that the former Chipotle CEO was the right leader for the company. The Leadership Experience marks the first occasion that Niccol and Schultz have appeared together publicly since the transition.
During Narasimhan's brief time as CEO, Schultz was candid about the company's performance, particularly after a disappointing quarterly earnings report. He publicly addressed the need for improvements in the mobile order and pay experience and emphasized the importance of innovating premium beverage offerings to distinguish Starbucks in a competitive market.
However, Schultz pointed out that Starbucks' challenges extend beyond operational shortcomings and uninspiring products. He articulated that the company's culture was not comprehended, valued, or upheld, highlighting the need for a renewed focus on the foundational principles that have long made Starbucks a cherished brand.
As Starbucks navigates this pivotal moment in its history, the collaboration between the experienced Schultz and the innovative Niccol may hold the key to revitalizing the coffee giant's legacy and ensuring its continued success in the future.
