Retail

Starbucks’ New CEO Kevin Johnson Talks Turnaround

Kevin Johnson officially starts today as Starbucks’ new CEO — just in time to try and turn the ship around as the coffee giant’s business is slow.

The company has had six years of 5 percent growth as a baseline — but in 2017 that hot streak came to an end, and Starbucks started missing sales targets. What brought that weakness on remains up for debate. One offered explanation is that mobile order-ahead, designed to bust lines, had actually just moved the line from the cash register to the coffee pick-up area.

And now Johnson steps in to replace CEO Howard Schultz — with a promise to get the business back on track with 5 percent growth in its same-store sales.

How?

Well, he is working to keep down the mobile order-ahead crowds with a dedicated barista ready to hand the on-the-go customers their drinks at the door to keep things moving along. That, he told The Wall Street Journal in an extensive conversation, may reduce some of the issue, though part of the issue in a general slowdown in U.S. restaurants that will require some innovating around.

“We’re very optimistic for the long term, but it requires continuous innovation.”

That includes doing some things differently — fresh made lunches are coming soon to Chicago — and they are looking to grow beyond urban areas in coastal cities.

“A lot of growth opportunities might be in less urban places, more suburban areas, the Midwest. Over the next five years we’ve projected building 12,000 additional stores globally, taking us to 37,000 stores. More than half of those stores will be in the U.S. and China.”

What Johnson said he is not willing to change is Starbucks’ focus on activism — like Shultz’s recent announcement that Starbucks would push to hire refugees and the internet backlash that followed.

“If it’s driven by our principles, I think it helps the company. Many of our veterans had worked with interpreters in Iraq and Afghanistan that are now refugees and so we saw that as very much aligned with the work we did hiring veterans. It helps us attract great talent, but it also shows that we care about helping create opportunities for people.”

“One of the reasons people come to work at Starbucks is because we stand for something. It’s about human connection and having a sense of humanity. We think that’s part of what makes Starbucks a special place that both partners and customers want to be associated with. And frankly, I think there should be more publicly traded companies that also think about not only creating shareholder value but how to contribute in a positive way to society.”

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