- Title: Starbucks' CEO transition unlikely to disrupt growth - analyst
- Date: 2nd December 2016
- Summary: CHICAGO, ILLINOIS, UNITED STATES (DECEMBER 2, 2016) (REUTERS) (SOUNDBITE) (English) TECHNOMIC GLOBAL FOOD/BEVERAGE TREND WATCHER AND CONSULTANT, DAVID HENKES, SAYING: "There's no question the two have been working very closely for the last two years, and Johnson has been on the board for the last seven. So, it's not like he's, you know, new to the Starbucks business. He's certainly intimate with the details, and has been working closely with Howard Schultz. I don't think this is a case where Howard Schultz is going to continue to pull the strings from behind the scenes. I think, Kevin Johnson will be his own man and be able to take the business where his vision leads. But at the same time there's no question that the two of them have been very close, and I think part of the reason that Howard Schultz is so comfortable turning the business over to him is that he realizes that their visions are very similar. And, so, you know, I think if they weren't so close, and he wasn't so comfortable with Kevin Johnson, that perhaps the timing would have been different. But, I think, given how close they are, I think that's certainly what's driven a big part of Howard Schultz's decision."
- Embargoed: 17th December 2016 18:01
- Keywords: Starbucks Howard Schultz Kevin Johnson coffee CEO
- Location: CHICAGO, ILLINOIS, AND SEATTLE, WASHINGTON, UNITED STATES
- City: CHICAGO, ILLINOIS, AND SEATTLE, WASHINGTON, UNITED STATES
- Country: USA
- Reuters ID: LVA0075B6ZYQ5
- Aspect Ratio: 16:9
- Story Text: EDITORS PLEASE NOTE: SOUNDBITES VIDEO AS INCOMING
Starbucks Chief Executive Howard Schultz's decision to step down is unlikely to disrupt growth at the world's biggest coffee chain as his successor Kevin Johnson is well suited to take the helm, analysts said.
Starbucks said on Thursday (December 1) that Schultz would step down as CEO on April 3 to focus on new high-end coffee shops, handing the top job to Chief Operating Officer Johnson, a long-time technology executive.
The company's shares were down 2.6 percent on Friday (December 2) as investors worried that the legendary CEO's exit would spell trouble for the company.
The last time Schultz stepped down as CEO - in 2000 - the company's shares plunged. Schultz returned to the top job in 2008. Since then the company's annual sales have more than doubled and its stock has risen six-fold.
Johnson's experience working with Schultz for nearly two years, as well as his technology background that includes stints at Microsoft and Juniper Networks, positions him well for the job, food and beverage trend watcher David Henkes said.
"There were some initial concerns about Kevin Johnson, and his retail background, and how well he actually understood the business, given his tech background. But it seems that, given the way Starbucks is trending, and all the tech investment - and quite frankly, there's a huge tech platform that Starbucks has that drives a lot of their sales right now - it seems that Kevin is certainly well positioned, and will be a good addition to the ranks of CEO, and should help the business immensely," he said.
Schultz said that he had personally asked Johnson to take the CEO job, highlighting Johnson's technology chops at a time when the company is trying to project itself as a pioneer in mobile payments technology.
Starbucks was the first to push into mobile ordering and payments through its app, allowing customers to avoid standing in long lines and forcing rivals like Dunkin' Brands Group and Panera Bread to follow suit. The mobile payments strategy has proved hugely successful - a quarter of all transactions in Starbucks' latest quarter was through mobile phones. Starbucks' quarterly revenue has risen at a pace of least 7 percent since 2009, much faster than that of Dunkin' and McDonald's.
The outgoing CEO said on Thursday (December 1) that in his new role he would focus on building the ultra-premium Starbucks Reserve stores and showcase Roastery and Tasting Rooms around the world. These efforts come as Starbucks is trying to stave off competition from super-premium coffee rivals such as Blue Bottle and Intelligentsia.
The company opened its first Reserve Roastery and Tasting Room in 2014 in Seattle - Starbucks' birthplace - to roast and sell limited-supply Reserve coffees. It plans to open three more in Shanghai, New York and Tokyo.
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