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Howard Schultz is leaving Starbucks this month. The company announced he’s “thinking of a wide range of options. . . from philanthropy to public service.” “Public service” has become the code word for “politics.” Will he be missed?

Well, Schultz retired once before to the detriment of the brand – then came back, and the brand has been growing, but not like it has in years gone by.

There have been a number of ill-considered Starbucks social programs. The “Holiday Cup” debacle, the “Race Together” cup debacle, and the arrest-of-two- black-men-waiting-for-a-friend-in-a-Philadelphia-Starbucks debacle. Oh, and they’ve raised prices. Again.

Brand Keys tracks Starbucks in its Customer Loyalty Engagement Index. There have been brand ups and downs, but current numbers show it to be #2 (in rankings by their own customers), with the out-of-home coffee category looking like this:

  1. Dunkin’
  2. Starbucks
  3. Tim Hortons
  4. McDonald’s

As these rankings always correlate (.80+) with consumer behavior, it’s not surprising to us that Starbucks growth has slowed dramatically and investors are underwhelmed by the company outlook.

For more insight in what Mr. Schultz’s departure will mean for the company and the brand, we invite you read Reuters’ story, “Starbucks investors mourn end of an era as Schultz exits.”

The company is hoping China will be its salvation. It’s looking to triple revenue there over the next five years.

And maybe that’s why politics are looking like a real opportunity for Mr. Schultz.

 


Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

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