No sooner has the person gone away than the tea cools down? The current CEO of Starbucks plans to subvert his predecessor's plan to open a high-end store.

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CEO before and after Starbucks made poles in development planning.

According to the Wall Street Journal, Starbucks CEO Kevin Johnson (Kevin Johnson) is scaling back some of the major initiatives developed by the company's founder and former CEO Howard Howard Schultz to revive sales in the coffee shop business.

Howard Schultz has an ambitious plan to build an upscale coffee shop with a related brand, and he set the core of this development strategy two years ago.

Under Schultz's vision, Starbucks plans to open about 1000 Starbucks selection stores (Reserve), which will use the latest technology to brew more expensive coffee, offer hand-baked goods and even specialty cocktails. In addition, in up to 30 Starbucks selected roasters, employees can do all these things as well as bake coffee.

Johnson is taking a more cautious approach to selection stores and bakeries and has decided to scale back the plan. "1000 is just a wish," he said in a recent interview. Starbucks will test whether 6 to 10 stores can meet the return demand before deciding whether to continue to expand, he said.

The move is the latest in Johnson's nearly two years in office, phasing out most of Schultz's plans to expand Starbucks beyond familiar coffee shops. Mr Johnson said he was trying to bring more rigorous financial planning to the business and return more cash to shareholders.

A former Microsoft executive and a longtime Starbucks board member, Johnson became Starbucks' head of operations in 2015 and took over as CEO in April 2017. In the past few months, he often said before the meeting: "it is understood that I am not Howard, I am Kevin."

Starbucks is under pressure to expand sales in the increasingly crowded coffee market. The company has experienced 5% or more quarterly growth in same-store sales in the United States for years, but began to miss sales targets in 2016.

Some analysts say that as other boutique coffee shops have sprung up in the city, the opening of new stores has accelerated and customer growth has slowed. At the same time, lower-priced competitors have become more active in promoting quality coffee.

Starbucks'U. S. passenger traffic fell for two consecutive quarters and fell for the first time in fiscal year 2018. Starbucks has had two rounds of layoffs before because of poor revenue. In September and November 2018, Johnson twice announced changes to the company's organizational structure, the first starting at the top of the company, and the second announced 350 layoffs, accounting for about 5% of its total workforce.

Schultz, who resigned as chairman in June, said the opening of new boutique stores would offset the decline in traffic at Starbucks cafes, which coincided with the rise of the "third coffee wave" (Third wave of coffee). With the decline in passenger traffic in many shopping malls and shopping malls, the number of Starbucks who open stores here has also decreased. Schultz believes that high-end selection stores will give customers a reason to pay door-to-door.

Johnson tried to stress that he was more data-driven and analytical than his predecessor. "of course, I tend to take a more rigorous approach to picking priorities." He said at a meeting two weeks after taking over as CEO.

This set of requirements also extends to the expansion of the store, and he wants to slow down across the United States. He is also committed to improving customer service, promoting the development of more innovative drinks and expanding the scope of business in China. Starbucks has opened its mobile payment app to non-members and expanded its coffee delivery service to 2000 of its more than 8000 stores in the United States.

For the 2019 target, Johnson said he wants same-store sales to grow by 3% to 4%. However, some analysts believe that the new goal is still "somewhat optimistic."

Cowen & Co. "We are skeptical about the attractiveness of coffee takeout because, in a nutshell, it goes against the fundamental purpose of casual coffee," said analyst Andrew Charles.

Source: Wall Street Journal, Kuiheng website

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