Starbucks Looks for a Fresh Jolt
By Barbara Kiviat / Seattle
I'm walking up to a starbucks with Howard Schultz when we spot a barista standing in the parking lot, passing 11 cups of coffee through a car window. "I've never seen that," says Schultz, who took over Starbucks in 1987 and transformed it from a six-shop seller of beans into a thread that runs through our social tapestry. He asks the barista what she's doing. She says the drive-through order was so large she decided to bring it out. Schultz waves to the driver to roll down her window--"Where are they going with 11 beverages?" he wants to know--but as he approaches the car, the driver speeds away. Sometimes it's tough to connect with your customers. But Schultz is trying. Very, very hard.
Starbucks has been so successful, it may seem unassailable, untouchable--unavoidable. It's not. In fact, the company has had a very difficult year. Traffic at U.S. stores dropped for the first time in its history, and then comparable-store sales--a key measure of a retailer's health--turned negative too. Its stock has slid some 40% in the past 12 months, shaving more than $400 million from Schultz's personal bean pile.
But perhaps most hurtful have been the mounting complaints from customers, employees and even Schultz himself that in its pursuit of growth, the company has strayed too far from its roots. As Schultz memorably wrote to the company's top execs on Valentine's Day, 2007, "We have had to make a series of decisions that, in retrospect, have led to the watering down of the Starbucks experience and what some might call the commoditization of our brand." The company that taught us that coffee is not a commodity has itself become one.
So Schultz is taking it upon himself to restore the cult of caffeine. On ...