Retail

Howard Schultz Leads Starbucks’ Upscale Push

Starbucks Upscale Push

On the heels of the announcement that Starbucks CEO Howard Schultz will step down in 2017 to take on the role of executive chairman, Bloomberg reported that his plans are to make the global coffee chain even more upscale.

The plan will include pushing worldwide growth of the company’s premium coffee line Reserve and the opening of 1,000 retail locations dedicated to showcasing the new brand. The larger flagship stores, called Roasteries, are expected to be as large as 20,000 square feet.

“When you’re making an investment and taking a risk like this, there’s no better person to spearhead it than Howard,” Darren Tristano, president of Technomic Inc., told Bloomberg. “He has a very high chance of succeeding in this type of role and helping the brand evolve.”

Starbucks opened its first Roastery location two years ago in Seattle, with plans to open other locations in New York, Shanghai and Tokyo. The retail emporiums allow customers to watch coffee being roasted on site and will serve as high-end flagship locations for the company. There are also plans for new cafes that are similar to Roasteries but will not offer the bean-cooking operation, which Schultz said will add variety to the brand’s store concepts globally.

“[Howard Schultz] has always had grand visions for where Starbucks can go,” Jennifer Bartashus, a Bloomberg Intelligence analyst, explained. “The ability for him to separate himself from the day-to-day running of the company and focus on big ideas is well within his wheelhouse.”

Starbucks announced its new leadership structure last week, which it said will help to usher in a new wave a digital growth. As of April 3, 2017, Schultz will be replaced by Starbucks President and COO Kevin Johnson.

“Starbucks consistently outperforms the retail industry because our stores, our offerings and the experiences our partners create make us a destination,” Schultz said in a statement. “The best evidence of the success of the core strategy driving our business is that we continue to deliver quarter after quarter of record, industry-leading revenue, comp sales and profit growth, and that the newest classes of Starbucks stores continue to deliver record-breaking revenues, AUVs and ROI, both in the U.S. and around the world.”

“As I focus on Starbucks next wave of retail innovation, I am delighted that Kevin Johnson — our current president, coo, a seven-year board member and my partner in running every facet of Starbucks business over the last two years — has agreed to assume the duties of Starbucks chief executive officer,” he added. “This move ideally positions Starbucks to continue profitably growing our core business around the world into the future.”

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