WHEN: Today, Wednesday, September 7, 2022
WHERE: CNBC’s “Squawk Box”
Following are excerpts from a CNBC exclusive interview with Starbucks Founder Howard Schultz and Starbucks Incoming CEO Laxman Narasimhan on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Wednesday, September 7th. Following is a link to video on CNBC.com:
All references must be sourced to CNBC.
SCHULTZ ON LAXMAN NARASIMHAN BECOMING CEO
HOWARD SCHULTZ: When we met Laxman, what I saw in him was somebody who was a global citizen, a world class operator, an entrepreneur, and he’s got that DNA all over it and everything he’s done. But most importantly, he’s steeped in humility and understands and respects the culture and values of Starbucks Coffee Company. He’s going to be a great, great leader for the future of our company.
SCHULTZ: We have spent a great deal of time together over the last few months. We know each other very well. But I think it really speaks to the humility and the confidence that we have in each other, we have in the future the company and we’re going to take our time to be very deliberate and put Laxman in a position to succeed. And I think we’re gonna have a great time over the next few months.
SCHULTZ: I’m never coming back again because we found the right person, but the ambition of Starbucks is much grander than ever before. And the leadership team, coupled with Laxman’s leadership, is much different than ever before. Also in 2008, when I did come back, Starbucks was in a much different position. We did not have demand in our stores. We have record demand today. Laxman is coming in with the wind at his back and so the growth of the company and the equity of the brand, the significant position that Starbucks occupies in China is very, very different. But Andrew, I’m not coming back the third time. Laxman is here, I’m here to support them and as I said before, we found a number one draft choice, the best possible candidate in the world to lead Starbucks.
NARASIMHAN ON STARBUCKS BEING ICONIC
LAXMAN NARASIMHAN: And it’s a unique opportunity for me to apprentice, very close to an iconic founder in an iconic company with an iconic brand. And what we’re doing is a very structured immersion process, which involves connecting with partners, connecting in stores. It’s about understanding the support center, what all happens there. It’s six months really of learning and getting steeped in the culture. I have a culture coach who’s with me pretty much the entire journey and so we’re building this in a very structured manner. So, at the end of it, I’m ready to take over, and will do so at the early part of next year.
SCHULTZ ON CHINA
SCHULTZ: In terms of China, we’ve been in China now 21 years. We occupy a position like no other Western brand about 6,000 stores. We’re opening one store every 10 hours in China. The situation in China is opening up so our position there, China will be much larger than the US when we’re all said and done.
SCHULTZ ON INFLATION AND UNIONS
SCHULTZ: In terms of inflation, where we’ve operated with inflation and that headwind many, many times, it’s going to come down and we’re doing fine. In terms of the union, it’s very simple. We have a different vision for our people and the customer experience than a third party. That’s simple.
SCHULTZ: We built the kind of company in which the equity of the brand is based on us exceeding the expectations of our people and then exceeding the expectations of our customers. You’re right, we created healthcare, free college tuition, equity in the form of stock options, all those things. Now all of a sudden, something shows up that’s a little bit different than what we prepared for. But, there are 9,000 company owned stores and only 300 have been petitioned. So I think there’s been a lot made of this that’s probably greater. It’s not going to be something that is going to significantly change the course of history for Starbucks. It’s that simple.
SCHULTZ ON PRICE OF STARBUCKS
SCHULTZ: We haven’t seen any attrition whatsoever that demonstrates to us that the price of Starbucks coffee is not something that customers are, they want to give up. And so the demand for Starbucks despite the fact that we had to raise prices about 5% over the past year because of inflation. Our business is quite strong, and it’s still an affordable luxury.
SCHULTZ ON RETURN TO OFFICE
SCHULTZ: And I, you know, I’ve asked people to come back. I made a comment that went viral that I would do push ups, get on my head, do anything I can. Here’s the point. We’re a collaborative organization, we need to be together. Also, I want to respect the fact that 2, 300,000 people in the US are working in our stores every day, in our roasting plants. I want to respect them. So I’ve asked our people to come back about three days a week, and they’re starting to come back. I’m really pleased with that.
