STAR! *points at computer screen*
Hmm, that doesn’t quite work with blogs.
Anyway, did you know that when I was graduating high school, I was such a fan of Starbucks that I actually did a photoshoot in one of the stores for my senior memory book?
No, seriously. I actually did. Here’s the proof:
I know, I know. I was full-on, with no shame, committed to the Starbucks fandom. There was nothing more exciting at that time than grabbing a delicious (and yes, pink) Quadruple Grande Non-Fat Raspberry Latte in the morning and then a Strawberry Frappuccino (yes, still pink) in the afternoon. There was no other career goal than becoming a Starbucks Partner (no matter how many of my applications were rejected), and when Starbucks started a rewards program during my college years, I quickly and proudly reached gold card status.
But who could blame me? Starbucks is the Apple of coffee. Without it, the coffee industry that we know today would likely be completely different if not practically nonexistent. Starbucks was and still is a major influencer economically, politically, technologically, and culturally in the United States.
Now despite a few setbacks over the past decade, particularly during the Great Recession, Restaurant Business Magazine reported that Starbucks was the largest coffee chain in the United States going into 2017, followed by Dunkin’ Donuts, Tim Hortons, Peet’s Coffee & Tea, and Caribou Coffee. The company has clearly been able to maintain its gigantic status within the country despite increasing competition as well as expand into other areas of the globe, mainly in China.
I attribute much of this success to the continued leadership of Howard Schultz, who bought the company back in 1987 from the original founders. After developing Starbucks into a national corporation, Schultz stepped down from his position as CEO in 2000 mainly due to exhaustion, but in 2008 when the company was showing warning signs of a downturn and a divergence from its original core values, Schultz returned, making sweeping changes that ensured its survival during one of the most devastating recessions in the history of the country.
Interestingly enough, it’s incredibly timely that I am talking about Howard Schultz in my blog this week as he announced his permanent departure from Starbucks this past month.
Now, Schultz hasn’t been the CEO of Starbucks since 2016, at which point he stepped into the role of executive chairman while Kevin Johnson took his place, so his departure won’t be a complete shock to the system for the company, but it’s unlikely that it won’t be felt to some degree considering he was a regular in Johnson’s office. Complicating matters, the CFO of Starbucks, Scott Maw, just announced his retirement (at the old age of 50) this morning. Retirement or not, departing CFOs are always somewhat worrisome.
So should we expect Starbucks to remain successful in the future considering the corporate changes taking place?
It’s hard to tell at this point. Starbucks has been successful in its expansion into China, and there are currently no plans to slow that down, but just last week, the company also announced the closure of 150 stores during the next year, which is three times greater than usual. In addition, expectations for same-store sales growth for this next quarter have decreased. Mounting competition and shifts in consumer tastes towards healthier eating have both contributed to slowing sales.
Also, considering the company’s prevalence throughout the country, the corporation is subject to much greater scrutiny from the public at large, and this fact became very clear after two black men were arrested in a store for trespassing when they were just waiting for a friend to arrive. In response, the company shut down all 8,000 stores for an afternoon of mandatory racial-bias training, but only time will tell if this is just an isolated incident or a more pervasive problem. Either way, this has been devastating Starbucks’s reputation.
So what do I think will need to happen for the company to continue its success?
Well, if I’ve learned anything when it comes to Starbucks, it’s that to find the best course of action one must ask, “What would Howard do?”
WWHD bracelets, anyone?
Anyway, looking back at his return to the CEO position in 2008, his main concern at that time was to get the corporation back on track with its core values, and when I reflect on the company and my current experiences in its stores, I think that’s actually really close to the main problem with Starbucks today. It doesn’t feel like a coffee company anymore. To me, it’s just a general drink company.
So what exactly do I mean by that?
Well, you’ll just have to tune in next week when I discuss what makes a coffee shop a coffee shop.
Yeah, that’s right. Coffee blog cliffhanger. Inspired by cliffhanger extraordinaire, Rick Riordan.
Until next time,
The one and the only Pookachino