Starbucks pledges change — and lots of it

The changes come more than a year after Schultz fretted in an internal memo that the company’s brand was being watered down by decisions made during its years of go-go growth. Starbucks has recently seen a drop in customer traffic to its U.S. stores, and its share price has fallen sharply. The company has since slowed somewhat the pace of store openings and closed some stores, in addition to the changes aimed to improving Starbucks business.

Michael Roberto, a professor of management at Bryant University in Smithfield, R.I., noted that one of the biggest challenges companies face is in deciding what not to pursue.

“Great firms make tradeoffs. They know when to say, ‘No,’” he said.

Over the past few years, he thinks Starbucks said “yes” to too many ideas. While he applauds Starbucks’ recent decision to stop serving breakfast sandwiches — which many people complained added an unpleasant odor to the stores — he has been surprised that the company has not talked more about what else they will do to simplify their offerings.

Roberto thinks the company would do well to cut back even more on its food offerings, and also to pare down the knick knacks, coffee mugs and other items that clutter its stores.

Still, there may be a question of how much impact any type of shakeup can have right now. For years, Starbucks was thought to be largely immune to economic downturns, with Schultz referring to its pricey coffee drinks as the type of affordable luxury people splurged on even in hard times.

But Schultz acknowledged Wednesday that the current economic downturn is taking its toll on Starbucks customers like never before. But while economic troubles may have made Starbucks’ problems even worse, Schultz said Wednesday that the company also needed to acknowledge its own role in weakening its business.

“We do not want to use the economy as an excuse,” he said.

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