Here’s Why Starbucks CEO Howard Schultz Just Stepped Down
America’s largest coffee chain just dropped some big news and it has nothing to do with secret menu items.
In a live webcast presentation followed by a conference call Starbucks’ Coffee CEO Howard Schultz announced, Thursday, that he will step down as the company’s Chief Executive Officer in April 2017. Current Starbuck’s COO and executive Board member Kevin Johnson will be appointed as the coffee giant’s new CEO.
“I sensed were the early signs of a seismic shift in consumer behavior – away from bricks-and-mortar and towards mobile and online retailing,” Schultz explained. “Today, that shift has taken firm hold around the world, both disrupting and redefining retailing and significantly reducing the consumer foot-traffic that traditional retailers have relied on for decades.
Schultz will transition to a role as executive chairman, where he will focus on, “Starbucks’ next wave of retail innovation,” Shultz said, according to a company press release.
Both Schultz and Johnson explained that they worked together to prepare for this transition and expressed confidence that this leadership change was the best option moving forward, considering changes coming to Starbucks’ business model.
Schultz explained that mobile and application based ordering is driving customers away from brick and mortar locations. To combat that shift, Starbucks will focus on deepening the customers experience through new retail strategies centralized around opening Starbucks Roastery and Reserve Stores and Reserve Bars on a international scale.
Starbucks’ Roasteries and Starbucks Reserve brand are brick and mortar storefront locations that feature deeper menu options, like cold brew and nitro brew, as well as coffee infused alcoholic beverages.
“Going forward, we will open at least 20 Roasteries around the world, six by the end of calendar 2019 alone,” Schultz said during the Thursday afternoon conference call. “At the same time, elements of the Roastery are forming the basis of the 1,000 or more Starbucks Reserve stores we will be opening around the world in the years ahead.”
While specific details are still developing, Starbucks’ plans to reveal — in detail — its revitalized business plan during an investors conference in New York, on Dec. 7.
