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Why Starbucks has lost millions of customers - by the man who turned it into the world's biggest coffee chain
Starbucks customers have had enough of high prices and painfully slow service - with the coffee chain admitting it has lost tens of millions of visitors this year.
It seems that former CEO Howard Schultz - who spent nearly four decades building Starbucks into the world's biggest coffee chain - has had enough too.
The billionaire, who left last year, said on Sunday that the chain's new bosses should stop making excuses. He wants them to spend more time in stores - to see what customers want - and also focus on coffee.
Instead, the current boss Laxman Narasimhan is pinning his hopes on quirky offerings - not linked to coffee - such as boba drinks, sugar-free options and the brand's first energy beverage.
One thing that everyone agrees on - including Schultz, Narasimhan and fed-up customers - is that Starbucks needs to tackle the often long waits for a coffee.
One thing the current CEO and the old one don't seem want to talk about are the sky-high prices - with standard coffees like lattes more than $6.
Starbucks founder and former 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
Statbucks CEO Laxman Narasimhan said slow service was putting off customers
Starbucks customers are ditching orders while in the line - as they take too long
'At any company that misses badly, there must be contrition and renewed focus and discipline on the core,' wrote in a LinkedIn post on Sunday.
'Own the shortcoming without the slightest semblance of an excuse.'
In his post, Schultz said senior leaders - including board members - need to spend more time talking to baristas in the company´s stores.
'I have emphasized that the company´s fix needs to begin at home: US 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.'
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.
Shultz wasn't actually the founder of Starbucks. But he bought it from its previous owners in 1987 when it had just 17 locations and turned it into the biggest coffee chain in the world.
In the LinkedIn post published Sunday, Schultz said many people had reached out to him after Starbucks reported disasterous earnings for the January to March period last week.
Starbucks - which has about 17,000 stores in North America - saw a fall in sales for the first time since the height of the pandemic as tens of millions of customers stopped going to its cafes.
It was only in November it reported record takings.
A long list of excuses for the huge drop in customers was offered by current CEO Laxman Narasimhan.
Americans continuing to tighten their belts, bad weather and boycotts by pro-Palestinian supporters all played a role.
Narasimhan also said that the chain's infamously slow service - which led to an astonishing one in seven mobile orders being abandoned - was a big factor. Narasimhan said Starbucks would continue to see slow sales in the spring and summer.
He was mocked by commentators for suggesting the answer lay in strange drinks like new lavendar infused teas.
It was not what Shultz wanted to hear, no did investors like it - shares plummeted.
Howard Schultz, left, speaks while he is still interim Starbucks CEO after introducing incoming CEO Laxman Narasimhan during an investor day in 2022 in Seattle
Schultz wants current Starbucks bosses to put the focus back on coffee, not gimmicky drinks
Starbucks, in the first three months of the year, has lost millions of customers
Schultz, who bought Starbucks in 1987, is credited with growing the company into the global behemoth it has become with nearly 39,000 stores worldwide.
Schultz, who stepped down from the board last fall, remains Starbucks´ largest individual shareholder, holding shares that were valued at $1.5 billion at the end of last year.
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.
Narasimhan did announce plans for coffee pop-up stores in the US and elsewhere last month.
Starbucks plans to use the stores to experiment with limited-edition coffee drinks, teach younger customers about coffee and learn about customers' preferences.
Schultz also said the company should update its mobile ordering and payment platform to 'once again make it the uplifting experience it was designed to be.'
He didn't specify the changes he thinks should be made.
On Monday, Starbucks said in a statement: 'We always appreciate Howard´s perspective. The challenges and opportunities he highlights are the ones we are focused on. And like Howard, we are confident in Starbucks long-term success.'
On TikTok, mikeylorenz0 complained that for a black coffee he has to 'wait 20 minutes' while others order a 'venti iced grande sugar caramel marshmallow ugat'. He called for an express line for people who just want basic drinks like a black coffee or a latte without modifications.
Schultz has a history of stepping in when he see Starbucks struggling. He retired as CEO in 2000 and became the company´s chairman, then returned as CEO in 2008 when the company was dealing with the recession.
Schultz stepped down again in 2017 but returned to lead the company on a temporary basis in 2022.
In 2023, he named Narasimhan, a former PepsiCo executive, as CEO. Schultz became chairman emeritus when he left the board.
Starbucks shares were flat Monday. The company's stock price has fallen more than 20 percent since the start of this year.