Starbucks Corp. (NASDAQ: SBUX | SBUX Price Prediction) told its white-collar management that they had to come to its offices at least four days a week. Some will need to move to its headquarters in Seattle. That will not fix a broken company with flagging sales, one that cannot even keep daily food inventory during an entire day on some days. It also will not fix the problem of trash piled up in front of some of its locations.
CEO Brian Niccol has established new rules he thinks will help Starbucks turn around. Locations will become more like local coffee shops. Baristas have new uniforms. The variety of items it sells has decreased. It has cut back on its white-collar workers.
Executives who do not want to follow the new rule can take an exit package. Of course, some people who take it may be among the better people Starbucks employs. And Niccol’s contract allows him to commute from his home in Southern California some days. His new rule about white-collar behavior does not seem to apply to him, which is great for morale. As he made the announcement, Niccol said, “But as a company built on human connection, and given the scale of the turnaround ahead, we believe this is the right path for Starbucks.”
Maybe Niccol can say why Starbucks stock is up slightly less than the overall market this year. Or maybe he can say why comparable store sales fell 1% last quarter, or why revenue was up only a little more than 2% to $8.7 billion. How about why per-share earnings dropped from $0.68 to $0.34?
Fix the trash problem, and have food inventory in place every day.
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