Howard Schultz asserts that Starbucks must redesign its stores following a substantial earnings shortfall

Former Starbucks CEO Howard Schultz chimed in on Sunday regarding the coffee chain’s disappointing quarterly report, expressing confidence in the company’s potential for recovery through enhancements to its U.S. stores.

Despite no longer holding a formal position within Starbucks, Schultz pinpointed a key factor contributing to the downturn. He emphasized the need for improvements in the mobile ordering and payment experience, as well as a strategic focus on premium offerings to differentiate the brand.

In a letter posted to LinkedIn on Sunday evening, Schultz underscored the imperative for a customer-centric approach to store operations, stressing the importance of viewing the business through a merchant’s lens rather than relying solely on data.

Following the quarterly report, which fell short of Wall Street’s expectations due to a surprise decline in same-store sales, Starbucks revised its full-year forecast, leading to a 17% drop in its shares and a decrease in market value to $82.8 billion.

Analysts scrambled to uncover reasons behind the chain’s underperformance, with some attributing it to potential fallout from social media criticism regarding Starbucks’ stance on conflicts in the Middle East.

Schultz, known for transforming Starbucks into a global coffee powerhouse, stepped down as CEO just over a year ago, handing over leadership to Laxman Narasimhan. He also resigned from the Starbucks board in the same period.

Offering insights to his successor, Schultz emphasized the importance of humility and confidence in leadership, underscoring the need to rebuild trust and enhance performance throughout the organization.

Although Schultz previously stated he has no intention of returning as Starbucks’ CEO, his ongoing engagement underscores his continued interest in the company’s success.