Starbucks faces lower sales, big challenges

Starbucks is not just a coffee giant — it’s the coffee giant. But the giant isn’t feeling so well these days. “Starbucks’ growth seemed unstoppable” during the pandemic, said The New York Times, but latte addicts now seem to be pulling back: The company’s revenue dropped 1.8% in the first quarter of 2024, driven by falling same-store sales in the United States and abroad. “This quarter’s results do not reflect the power of our brand, our capabilities or opportunities ahead,” said Starbucks CEO Laxman Narasimhan.

Narasimhan’s recently retired predecessor, Howard Schultz — a onetime celebrity CEO and nearly a candidate for president in 2020 — is weighing in with some advice on what he calls Starbucks’ “fall from grace,” said Heather Haddon at The Wall Street Journal. “The stores require a maniacal focus on the customer experience, through the eyes of a merchant,” Schultz wrote in a LinkedIn post. That means company executives should “spend more time working in cafes” and work to improve Starbucks’ mobile app. The advice raised some eyebrows: “Former CEOs tend to keep a low profile to give their successors room to make their mark,” Haddon said.  

Consumers are pulling back