How Starbucks changed under departing CEO Kevin Johnson
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2 min read . Updated: 03 Apr 2022, 07:35 PM IST Howard Schultz will return for third executive stint as sales return to prepandemic levels
The chief executive officer of Starbucks Corp. is stepping down Monday, after half a decade running the world’s largest coffee chain. Kevin Johnson oversaw a period of growth followed by a volatile couple of years as the Covid-19 pandemic disrupted life around the globe.
Mr. Johnson, whose departure was announced in mid-March, is to be replaced with interim CEO Howard Schultz, who served as chief executive twice already from 1987–2000 and 2008–17.
Over the course of his tenure, Mr. Johnson has had to navigate store closures during pandemic lockdowns, rising competition to the brand’s dominance in the U.S. and China, and the most serious U.S. unionization drive in the company’s history.
Aside from a dip amid the Covid-19 pandemic, the coffee chain’s sales have been steadily increasing annually during Mr. Johnson’s time. The company recorded $29.1 billion in sales for its latest fiscal year, up from $22.4 billion in 2017.
Starbucks same-store sales were inching up before the pandemic disrupted business. Cafe closures during the resulting lockdowns prompted the company’s comparable sales to fall for the first time in more than a decade.
Stock performance at the beginning of Mr. Johnson’s stint as CEO started off shaky, but ultimately rose until the pandemic hit. Since then, the company’s share price soared until a sharp drop in early 2022.
Locations continued to increase in number each quarter of Mr. Johnson’s tenure, especially internationally. In June 2020, the company sped up plans to permanently close hundreds of U.S. stores to pave the way for more to-go and drive-through locations.
Mr. Johnson first signaled to company directors around a year ago that he was thinking about retiring, and hoped to do so when the pandemic wound down, Starbucks board Chairwoman Mellody Hobson said. His decision to leave was his own, not the result of any board or outside push, she said.
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Rising costs, challenges in its Chinese and Russian markets, and an expanding unionization push among U.S. baristas are some of the challenges now facing the company. Mr. Schultz, the incoming interim CEO, has said that the company needs to reinvent itself once more.
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