A few years ago, Starbucks started a mini-chain of higher-end shops within their regular chain with fancier, “small-batch” coffees in an effort to compete with a new generation of coffee shops. This week, the company’s founder and CEO, Howard Schultz, announced that he’ll be stepping back from day-to-day management of the main business to think about the company’s overall strategy and concentrate on the high-end Reserve business.
Sure, a business that charges in the neighborhood of $50 for a pound of coffee isn’t for everyone, but the standalone stores and Reserve counters in serve as a lab for future innovations, like cold brew coffee, nitrogen-infused or not, and new types of beans. The brand also has a mail-order service that brings customers freshly roasted beans every month.
Regular Starbucks shops have reached saturation in the United States, so the way to expand their business is up: the company is after the higher-end market before companies like Stumptown, newly acquired by competitor Peet’s, go nationwide.
Even the recent change to Starbucks’ rewards program to benefit people who spend more instead of people who visit more often reflects a new emphasis on the Reserve business.
President and chief operating officer Kevin Johnson will be in charge of leading the company’s senior executives day-to-day, while Schultz makes his job about “store design and customers experience” for the luxury division.
Starbucks’ Schultz to step back, focus on high-end strategy [Seattle Times]
by Laura Northrup via Consumerist
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