With Starbucks' performance declining, why has it had three CEOs in just three years from 2022 to 2024?
Coffee shop chain Starbucks has seen its sales decline in recent years, and it has been
Can Starbucks Save Itself? - YouTube
When Starbucks first opened in the 1970s, coffee was just a drink in the United States. At the time, Starbucks was a small coffee bean retailer in Seattle, and Howard Schultz, who worked there, had the idea of 'bringing coffee to a high-end European style,' and founded the current style of Starbucks in the early 1980s with the concept of 'a third place where people can relax, neither at home nor at work.'
This concept proved a success, and Starbucks grew rapidly. By using high-quality coffee beans and serving coffee carefully prepared by baristas, Starbucks developed into a place where customers could enjoy 'everyday luxury.'
Today, Starbucks is the world's second largest restaurant chain after McDonald's, with over 40,000 stores worldwide.
In addition, in recent years, Starbucks has been offering coffee that requires complex blending, such as Frappuccino and cappuccino, as well as coffee blended with various fruits. Furthermore, during the COVID-19 pandemic in 2020, a mobile ordering service using smartphones was provided, making it easier to customize drinks than ordering in-store.
However, Starbucks faced a variety of problems, including an increase in complex drink orders due to mobile ordering, delays in serving customers, and increased burdens on employees due to chronic staff shortages. In 2021, Starbucks employees formed
These unfair labor practice strikes are an initial show of strength, and we're just getting started. We're going to keep fighting until Starbucks gives us a serious economic offer.
— Starbucks Workers United (@SBWorkersUnited) December 25, 2024
Starbucks should know: This is just the beginning. pic.twitter.com/pzE1FEU6MF
In response to this situation, Schultz, who stepped down as CEO in 2017, returned to the position in March 2022 and stated that 'the formation of a labor union is an affront to Starbucks' brand image as a company that cares about its employees,' and closed several stores where unions had formed, taking a hard-line stance that could be interpreted as 'union-busting.'
According to testimony from union members, the company has repeatedly taken actions that hinder union activities, such as refusing to engage in collective bargaining with the union.
Schultz will step down as CEO in April 2023. He will be succeeded by Laxman Narasimhan, former PepsiCo chief commercial officer. Under Narasimhan, the company and the labor union have begun dialogue. However, the contract regarding working conditions has hit a snag.
In addition, during the fighting between the Islamic Defense Forces and the militant group Hamas in the Gaza Strip, Palestine, which began in 2023, a boycott of Starbucks products broke out after Starbucks' labor union made pro-Palestinian posts on social media.
In addition, in China, one of Starbucks' largest growth regions, the emerging
Due to these problems, Starbucks' performance gradually deteriorated. Its operating profit for the full year 2024 was $5.48 billion (about 8.5 trillion yen), down 7.9% from the previous year.
Therefore, Starbucks will dismiss Mr. Narasimhan in August 2024 and appoint Brian Niccol, who has a track record of successfully rebuilding the Chipotle brand, which was shaken by food poisoning issues, as its new CEO. Mr. Niccol said, 'It is clear that Starbucks' business strategy needs to be fundamentally changed to regain the customers we have lost,' and promised to work on speeding up service, improving worker treatment, and making cafes more comfortable.
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