Starbucks CEO Announces Retirement! Howard Schultz Returns as CEO

Many people familiar with Starbucks have likely heard of Howard Schultz. This veteran, who had long since stepped away from the spotlight, announced his return yesterday. He will temporarily assume the role of Chief Executive Officer starting April 4, 2022, until a new successor is selected.

The arrival of the pandemic severely impacted the food and beverage industry, and Starbucks' stock price plummeted accordingly. During the pandemic, current Starbucks CEO Kevin Johnson leveraged his experience from working at technology companies to bring Starbucks into the digital age while shifting more business toward drive-through and other delivery formats. Starbucks' performance began to steadily recover. Even as many restaurants struggled, Starbucks' sales remained strong. By spring 2021, Starbucks announced that its U.S. coffee sales business had fully recovered.

After seeing Starbucks' sales business fully recover, current CEO Kevin Johnson had previously signaled to the company's board of directors that he was considering retirement. Until yesterday (March 16), just hours before Starbucks' annual shareholder meeting, the official website released an announcement regarding high-level leadership transitions, stating that Kevin Johnson would step down as CEO and retire.

Until a suitable candidate is found, former CEO Howard Schultz, known as the "Starbucks Father," will temporarily return to serve as CEO. For this return, Howard Schultz will symbolically receive a base salary of $1 and be allowed to participate in Starbucks' employee welfare plan.

During that day's shareholder meeting, the Chairman of the Board stated that Howard Schultz is highly qualified to serve as the company's interim CEO, while also expressing gratitude for Johnson leading Starbucks through the historical challenges of the COVID-19 pandemic.

Howard Schultz's Contributions to Starbucks

Starbucks' ability to thrive would not have been possible without Howard Schultz's contributions. Although Starbucks was not founded by Howard Schultz, he gave Starbucks the opportunity for "rebirth." Starbucks was founded in 1971 and encountered a financial crisis in the late 1980s. Starbucks' founders contacted Howard Schultz for help in resolving the crisis.

Consequently, in 1987, Howard Schultz acquired the company's retail business from the original founders for $3.8 million and began serving as Starbucks' first CEO. At that time, Starbucks was just a coffee brand with 11 stores and over 100 employees in the United States.

After acquiring Starbucks, Howard Schultz expanded the company globally in just 4 years, a development speed that was quite astonishing at the time. In addition to the impressive growth rate, under Howard Schultz's leadership, Starbucks was officially listed on the stock exchange. However, due to excessive corporate expansion, Starbucks was also significantly impacted by the 1997 financial crisis, though it ultimately survived.

After resolving the financial crisis issues, Howard Schultz resigned from his positions as Starbucks President and CEO in 2000, taking on the role of Chairman of the Board. A few years later, when Starbucks faced management problems requiring Howard Schultz's leadership again, he served simultaneously as Chairman of the Board and CEO in 2008. It wasn't until 2017, when Kevin Johnson, who had been on Starbucks' board for 7 years, took over as CEO, that Howard Schultz announced his retirement in 2018.

Between 1987 and 2018, over 21 years, Howard Schultz led Starbucks from a small company with only 11 stores to a publicly traded company with over 28,000 stores across 77 countries. These achievements sufficiently demonstrate Howard Schultz's leadership capabilities.

Challenges Facing Howard Schultz's Return

In 2022, as current CEO Kevin Johnson's retirement date approaches, the company had not found a suitable replacement, so Howard Schultz was invited back to temporarily serve as Starbucks CEO. For this "comeback," Howard Schultz faces not only future development issues but also recent negative and challenging events involving Starbucks.

For example, the cost and sales pressure brought by the rapid expansion of stores in the Chinese market over the past two years, reports of some stores using expired ingredients last year, and an incident of police being driven away from a store this year have all brought various pressures to Starbucks' development in the Chinese market.

In the United States, staff shortages have led to "protests" from current employees, and the company has failed to successfully stop the vote counting for union elections. So far, employees at 6 U.S. stores have successfully joined unions through voting, while over 100 store petitions remain pending. If these votes are confirmed, Starbucks will be legally required to negotiate with unions regarding working conditions for employees at these stores.

Michael Halen, senior restaurant industry analyst at Bloomberg Intelligence, stated: "Before finding a suitable candidate for the next CEO, Howard Schultz is the right person to lead the company through these challenges."

The Future of Starbucks

From this statement, it's clear that currently only this veteran has the ability to lead Starbucks in turning around its existing situation. So far, Howard Schultz himself has not publicly revealed his future plans. Let's wait and see what the future holds for Starbucks.

Image source: Internet

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