Mon, January 30, 2023

Fall Brings Pumpkin Spice to Starbucks – And a New CEO

Starbucks

Fall is generally a good time to visit Starbucks cafes. They provide a cozy respite from the cold and rainy weather, and it’s the time they introduce numerous new flavors. However, pumpkin spice isn’t the biggest news hitting Starbucks stores this fall.

Namely, the cafe industry giant has named Laxman Narasimhan as its new CEO. He will start on October 1, and has stepped down from his previous CEO position at The Reckitt Benckiser Group. We found out about the position withdrawal earlier on Thursday.

He is replacing Howard Schultz, who was serving as a fill-in CEO until the company could find a more appropriate candidate. Schultz will, however, maintain a significant role at Starbucks, remaining a member of its board. Before the stand-in, Kevin Johnson was Starbucks’ last CEO.

Prior to stepping down, Schultz concluded Starbucks needed a restructuring and has laid out a plan to do so. During his first six months as CEO, Narasimhan will spend time with Schultz to familiarize himself with the company. Additionally, they will use that time to solidify the reinvention plan.

Key parts of the strategy include the redesigning of stores and experience improvement. The changes are meant to keep both customers and employees happier.

The focus on employee satisfaction, some believe, isn’t fully a willing concession by Starbucks. As many are aware, a unionization wave has hit the US, and Starbucks has had multiple stores unionize. The company has even faced claims of closing multiple stores due to the threat of unionization.

Narasimhan will need to find a solution to that issue. Additionally, he will need to find a way to deal with the waning business in China. As the Covid pandemic still periodically re-emerges, Starbucks stores are struggling to stay profitable. We will see if the restructuring does enough to stem Starbucks’ bleeding.

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