Starbucks Is Shifting Roles of Senior Management
July 25 2016 - 2:59PM
Dow Jones News
By Julie Jargon
Starbucks Corp. said Monday it was reorganizing the roles of its
senior leaders, a week after the coffee giant said it had a
sales-target miss for its third consecutive quarter.
Chief Executive Howard Schultz said he is shifting his focus to
the company's long-term strategy and innovation efforts.
Previously, he was focused on the company's digital technology
efforts.
Last week, the company cited global economic uncertainty and a
"profound weakening in consumer confidence" as reasons for its
sales slowdown in the latest quarter.
Executives said the quarter was an anomaly and a company
spokesman said the organizational changes "have nothing to do with
prior quarters."
But the executives also acknowledged some missteps, including a
summer beverage promotion it delayed because it coincided with a
controversial change to its loyalty program. The new program, which
rewards customers for the amount of money they spend rather than
the number of times they visit, was met with complaints from people
who come frequently to just buy a cup of coffee. Still, the number
of active loyalty program members grew 18% in the latest
period.
In the U.S., the company's same-store sales in the quarter ended
June 26 rose 4%, compared with 8% in the year-ago period.
Executives last week pledged to return the U.S. business to
historic levels of at least 5% same-store sales increases.
Mr. Schultz said in a letter to employees Monday that the board
of directors and senior leaders recently approved a long-term
growth plan that "will require a higher level of thoughtfulness,
creativity and discipline than at any other time in our
history."
Starbucks has been moving upscale lately as a way to capture the
trend toward premium coffee.
For instance, earlier in July the company announced plans to
partner with luxury Italian bakery Princi to develop and operate
all new Princi locations outside of Italy and to offer Princi baked
goods in Starbucks' new specialty coffee stores.
Under the new structure, Mr. Schultz will work closely with U.S.
and Americas Group President Cliff Burrows, who will head up a new
retail group dubbed "Siren Retail" in which his role will include
overseeing the global expansion of the Roastery stores and the
development of the Starbucks Reserve and Princi stores.
Kevin Johnson, president and chief operating officer, will lead
the Starbucks senior leadership team while China and Asia Pacific
Group President John Culver will expand his responsibilities to
assume the role of group president in charge of Starbucks retail
sales around the world.
Starbucks last shuffled its management ranks in January 2014,
when Mr. Schultz announced he would focus on product innovation and
digital retailing.
Write to Julie Jargon at julie.jargon@wsj.com
(END) Dow Jones Newswires
July 25, 2016 14:44 ET (18:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Starbucks (NASDAQ:SBUX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Starbucks (NASDAQ:SBUX)
Historical Stock Chart
From Apr 2023 to Apr 2024