Former Starbucks CEO says company needs to refocus on coffee as sales struggle

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Former Starbucks CEO Howard Schultz says the company’s leaders should spend more time in stores and focus on coffee drinks as they work to turn around flagging sales.

In a LinkedIn post published over the weekend, Schultz said many people had reached out to him after Starbucks reported weaker-than-expected quarterly sales and earnings last week.

The Seattle coffee giant said revenue dropped 2% in the January-March period as store traffic slowed around the world. It was the first time since 2020 that the company saw a drop in quarterly revenue. Starbucks also lowered its sales and earnings guidance for its full fiscal year.

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“I have emphasized that the company’s fix needs to begin at home: U.S. operations are the primary reason for the company’s fall from grace,” he said. “The stores require a maniacal focus on the customer experience, through the eyes of a merchant. The answer does not lie in data, but in the stores.”

Laxman Narasimhan, who became Starbucks’ CEO last spring, has been working a half-day shift in Starbucks stores once a month.

At some points in his post, Schultz seemed to be questioning Narasimhan’s turnaround plans. In a conference call with investors last week, Narasimhan mentioned several new products he thinks will drive customers to stores later this year, including boba drinks, sugar-free options and the brand’s first energy beverage.

But Schultz said coffee is what differentiates Starbucks and reinforce the company’s premium positioning.

“The go-to-market strategy needs to be overhauled and elevated with coffee-forward innovation,” he said.

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