Starbucks CEO and Chairman, Howard Schultz announced that he is stepping down from his role as CEO to shift his focus to innovation, design and development of Starbucks Reserve® Roasteries around the world, expansion of the Starbucks Reserve® retail store format and the company’s social impact initiatives, stated a Dec. 1 press release.
In this new role, Shultz will be appointed Executive Chairman, while continuing to serve as the Chairman of the board. Kevin Johnson, President and Chief Operating Officer and a 7-year member of the Starbucks Board of Directors, will expand his responsibilities and assume the role and responsibilities of president and chief executive officer, effective April 3, 2017.
“I do want to acknowledge the obvious: Howard Schultz is among the world’s most iconic leaders and entrepreneurs. I know Howard doesn’t personally think of himself that way, but as his business partner and friend, I know this to be true,” Johnson said, on a Dec. 1 Investor and Media Conference call, hosted by Schultz and Johnson. “It is a privilege to work side-by-side with Howard. I have great confidence in our strategy, the partnership that we have developed, and the world-class talent we have assembled.”
“Having Starbucks in my life has been a gift. I know I am not alone. So many Starbucks partners have shared their personal life stories with me and what Starbucks means to them,” Johnson added. “I have so much respect and admiration for the more than 300,000 partners who proudly wear the green apron in service of others, and I am proud to serve them.”
The call also discussed future plans for the expansion of Starbucks, which include plans to continue to offer an “increasingly elevated Starbucks experience” to customers.
Schultz shared that three years ago he had noticed the early signs a shift in consumer behavior away from bricks-and-mortar and towards mobile and online retailing, which has led to “disrupting and redefining retailing and significantly reducing the consumer foot-traffic that traditional retailers have relied on for decades.”
He added that although Starbucks has been able to consistently outperform the retain industry because they invested way ahead of the curve to create a world-class mobile, loyalty and digital capabilities, which led to record-breaking revenues, AUVs, ROI – both in the U.S. and around the world.
According to Schultz, the view of the “over-retailed” U.S. led to the inspired development of the Starbucks Roastery and Reserve brand.
“Since its opening two years ago, our Seattle Roastery has become widely recognized as the world’s most immersive, coffee-forward retail experience,” explained Schultz. “Executives from premier global retailers like Apple, Nike and Zara have shared with me their view that the Roastery delivers the best retail experience – in or out of coffee – that they have ever encountered.”
The Roastery introduced into the coffee category a previously unattained level of premiumization, achieved a comp sales increase of 24% and delivered a ticket that is four times the ticket of a typical Starbucks store.
By 2019, Starbucks will open 6 out of the 20 planned Roasteries, while forming the basis of 1000 more Starbucks Reserve stores they plan to open around the world in the years ahead. The company also plans to add Reserve bars in to thousands of existing Starbucks stores over time.
Starbucks Reserve is a new, premium retail coffee format that will showcase the newest coffee-brewing methods and offer customers the finest assortment of exclusive, micro-lot coffees sourced from around the world in an all sensory experience emblematic of our Seattle Roastery, paired with artisanal food offerings developed with our partners from Italian artisanal baker Princi.
“Like our current stores – and the new classes of Starbucks stores we will be opening globally in the years to come – Roasteries, Reserve Stores and Reserve bars that will be customer destination venues,” Schultz explained. “They will broaden, deepen and elevate our customer experience, and represent an unprecedented new global growth opportunity for the company.”
“I am personally as passionate about developing the Reserve brand, and opening more Roasteries, as I was about opening our first espresso bar more than 30 years ago in Seattle,” he added.
