Starbucks strengthens technology brew with executive shift
LOS ANGELES (Reuters) - Starbucks Corp Chief Executive Officer Howard Schultz on Wednesday said he was promoting Chief Financial Officer Troy Alstead to the new position of chief operating officer, allowing Schultz to focus on keeping the coffee shop chain ahead of the curve in retail technology including mobile payments.
Alstead will assume oversight of the company's day-to-day operations. Scott Maw, senior vice president of corporate finance, will succeed Alstead as CFO.
Starbucks, already a leader in mobile payments, gift cards, loyalty programs and digital marketing, for years has been finding ways to strengthen results by linking its cafe business and product sales through grocery stores and other retailers.
Schultz said such efforts helped the Seattle-based company outshine other U.S. retailers during the 2013 holiday season, when shopper visits to overall brick-and-mortar stores dropped and online sales increased.
Starbucks' traffic rose 4 percent during the quarter that included the holiday season. The chain also saw a record $1.4 billion loaded onto gift cards during that quarter.
The CEO expects the company's latest move to further strengthen Starbucks' (SBUX.O) business.
It is an opportunity for Starbucks "to create new channels of revenue and profit outside four walls of stores .. amid a seismic shift" in the way consumers are shopping, Schultz who is also chairman, told Reuters in a telephone interview.
Schultz, who will be working closely with executives including Chief Digital Officer Adam Brotman and Chief Strategy Officer Matt Ryan, declined to give specifics on the company's plans.
"This is not about succession planning and this is not about me in any planning to or even thinking about leaving the company," he said.
Starbucks is an investor in mobile payments provider Square. When asked if Starbucks would buy Square, which counts the coffee company among its users, Schultz said Starbucks has no near-term acquisition plans.
He did say that future efforts would include the use of "Starbucks currency in other retailers outside Starbucks."
Starbucks already allows registered Starbucks card users to earn "stars," or points, when they buy coffee at a participating grocery store. Those stars can then be redeemed at a Starbucks cafe.
Starbucks has mobile payment applications in eight countries
including the United States and Canada. It offers Starbucks cards in 28 countries.
The company reaps 70 percent of its total revenue from its U.S.-dominated Americas business, which includes sales from 11,500 U.S. cafes.
Its forecast for this fiscal year includes opening 1,500 new units around the globe - including 600 in the U.S.-dominated Americas region.
Shares in Starbucks inched up 0.2 percent to $71.70 in after-hours trade.
(Reporting by Lisa Baertlein in Los Angeles; Editing by David Gregorio)