Thursday, December 08, 2016

Starbucks CEO Resigns

Starbucks CEO resigns

Typically, at least for the past few years, if Starbucks is in the news in December it’s because of a “much ado about nothing” uproar related to “holiday cups.” Even though the company debuted the holiday-themed beverage holders way back in 1997, it wasn’t until a few years back that the cups became a source of so much faux outrage, mostly online.

But, these days, it’s likely Starbucks would like to be in the news for such a run of the mill reason. Instead, the headlines in the first weeks of December announced the imminent resignation of CEO Howard Schultz, who plans to “step down” from his post sometime next year.

According to a news release, while Mr. Schultz plans to remain chairman, and he plans to “focus on new Starbucks luxury brands. The same release announced Kevin Johnson, a longtime board member, would step into the CEO spot.

Schultz is nearly a Starbucks lifer, having been with the company for 30 years. He’s credited with helming the brand through massive expansion that, literally, has some intersections with Starbucks locations on facing corners.

After 18 years with the company, Schultz left for a bit, before returning in 2008. While the rest of the economy was tanking, Schultz grabbed Starbucks by the lapels and kept the coffee company going strong.

So, why is this not the news Starbucks wants? Because Schultz really isn’t the headline the company needs at the moment. They would much rather be touting the recent “record profits” enjoyed even as another near-miss CupGate hit social media. But, this year at least, Starbucks easily bested the tut-tutters online, raking in massive cash while thumbing their nose at anything that didn’t love their brand, up to and including the folks who recently elected the next President of the United States.

Not that Schultz is complaining about the attention. In a statement, he offered this assessment of his company’s present and its future: “Starbucks consistently outperforms the retail industry because our stores, our offerings and the experiences our partners create make us a destination…”

That’s not to say Starbucks doesn’t have some challenges. Like every tangentially mall-based dining destination, fewer shoppers at brick and mortar retailers means less foot traffic walking past and, presumably through, their doors. It’s a problem for every brand. Even as Starbucks flies off the shelves in grocery stores, the retail locations that drive the brand could see drastically declining numbers in coming years.

This is hardly an insurmountable problem, and it’s certain some brands will figure a way around it with a mix of good customer service and fan-attracting public relations.

Ronn Torossian is the Founder and CEO of the New York based public relations firm 5WPR: one of the 20 largest PR Firms in the United States.

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