According to Inc, Starbucks is closing more than 600 U.S. stores this year and cutting over 1,000 corporate jobs while shifting to a mobile-first operation that contradicts Howard Schultz’s original “third place” vision. The company recently sold 60% of its China business to a private equity firm after years of struggles in its second-largest market. Same-store sales finally increased after two years of declines, but management faces the difficult task of convincing customers that cutbacks will improve their experience rather than just save money. CEO Laxman Narasimhan’s commute from Newport Beach to Seattle on a company-owned private plane sends mixed messages during this restructuring period.
The identity crisis is real
Here’s the thing about Starbucks – they’ve been trying to be everything to everyone for years, and it’s just not working. The author makes a great point about how they need to admit they’re running a business, not a charity. Remember when Starbucks was that cozy “third place” between home and work? Now it’s becoming a glorified coffee vending machine where mobile orders fly past people waiting in line.
And that private plane situation? Seriously? When you’re closing stores and cutting jobs, having your CEO commute on a company jet from Newport Beach to Seattle is just tone-deaf. It makes you wonder if management really understands the message they’re sending to both employees and customers.
China struggles reveal deeper issues
The China situation is particularly telling. Selling 60% of your second-largest market business isn’t exactly a vote of confidence in your own ability to manage international operations. Starbucks has 8,000 stores in China, and they’re basically admitting they need local partners to figure things out.
But here’s what worries me – this feels like another case of Starbucks spreading itself too thin. When you’re trying to be a community center, a tech company, a global brand, and a local hangout all at once, something’s gotta give. Usually, it’s the customer experience that suffers.
Mobile-first means customer last?
The shift to mobile-first operations is fascinating because it completely abandons Schultz’s original vision. Removing seating, shrinking stores, focusing on kiosks and phones – it’s practical, sure, but is it what made Starbucks special in the first place?
I get that the pandemic changed everything, and Starbucks was late to the digital game. But now they’re swinging so hard in the other direction that they risk alienating the customers who actually enjoyed spending time in their stores. There’s got to be a balance between efficiency and experience.
Seasonal hype isn’t a strategy
Look, the holiday drinks will always sell. Peppermint mochas and eggnog lattes are basically printing money for a quarter. But as the author rightly points out, Santa isn’t going to save Starbucks long-term.
The real test will come in January, when the holiday glitter fades and they’re left with the same fundamental questions. Can they simplify their operations? Can they focus on what actually matters to paying customers? Can they stop trying to solve world problems and just make great coffee efficiently?
Basically, Starbucks needs to remember that they’re in the people business serving coffee, not the other way around. And that’s a lesson no amount of seasonal promotion can teach.
