Starbucks CEO and Chairman Howard Schultz– the expansion-oriented, espresso fanatic from Seattle who transformed the fortunes of a local coffee house into a world-famous brand with $21 billion in sales and over 25,000 stores- announced this past Tuesday (November 29th, 2016) that he will be stepping down as its chief executive in the spring. Schultz will instead become Starbucks executive chairman in April 2017 to focus on social impact activities as well as innovation. Kevin Johnson- named chief operating officer and president last year- will be the new CEO as of April 3rd.
Since returning as Starbucks CEO in 2008 (having left before in 2000 only to return as the organization and the rest of the U.S. economy suffered the fallout from the financial crisis), Schultz, 63, is credited with turning around its fortunes having overseen the expansion of its food and beverage offerings as well as the growth of its popular mobile app and loyalty program.
In fact, Starbucks has credited the app and rewards program for helping consistently increase its sales across the U.S. (although traffic has slightly dipped and slower growth registered in the last quarter). Schultz maintains that such technology adaptations will continue to become critical in order for brick-and-mortar retailers to thrive in the current economy as shopping trends change.
During a conference call discussing the announcement, an analyst described Schultz as being a master merchant’ who has been able to stimulate and even determine what customers need and want and wondered whether this merchant gene’ would survive the leadership changes. Another noted how Starbucks struggled following Schultz’s departure at the turn of the century and asked what would be different this time around.
Schultz, however, reiterated that the organization has built a strong leadership model in recent years and also reminded people that he is not leaving the company and would be at the forefront of the development of the next wave of retail innovation- high-end retail concepts known as Starbucks Reserve Roasteries which feature drinks such as cold brew’ coffee and coffee beans.
