Topic: How To Invest

What is Pat’s commentary for the week of January 10, 2023

Article Excerpt

Howard Schultz recently returned as interim chief executive officer at Starbucks Corp., following the retirement of Kevin Johnson. Mr. Schultz goes back a long way with the company. It was founded in 1971 by three individuals—English teacher Jerry Baldwin, history teacher Zev Siegl and writer Gordon Bowker. Mr. Schultz then bought the company from them in 1987. This is, in fact, Mr. Schultz’s third term as CEO at Starbucks. His long history with the company and his name recognition has helped stabilize the business as it deals with several recent challenges. The biggest challenge has been COVID-19 lockdowns in China, Starbucks’ largest market after the U.S. China has now moved away from its zero-COVID policies, although recent outbreaks are a concern. The company also faces increasing unionization at its stores in the U.S. In response, it has raised employee wages and benefits. Mr. Schultz recently announced a major new plan to spur Starbucks’ growth as the pandemic further eases. This involves new store formats…