Kevin R. Johnson – Starbucks Corp.
Retailers are dropping fast
“Thank you, Tom. Welcome, everyone. Before getting into Starbucks’ Q2 results, I thought I’d comment on a recent Wall Street Journal article noting that more retail stores have closed in the first quarter of calendar year 2017 than closed in all of 2016. And that more retail stores are expected to close in the U.S. this year than closed in any year during the Great Recession that began in 2008. The article illuminated once again the seismic shift in consumer behavior underway and the devastating impact that this sea change in behavior is having on many traditional brick and mortar retailers. Articles like this prompt three very important questions that I’ve repeatedly asked myself over the years and that I suppose many of you on today’s call have asked as well.”
Merge digital engagement with emotional connection
“The critical transformative components required for any brick and mortar retailer to survive, let alone succeed in the future are an engaging, digital and mobile relationship with customers that is threaded into a branded, immersive, experiential retail destination. The attributes of the destination will vary. They may include theater, intrigue, or romance. But the common denominator will be the creation of a consumer experience that evokes human emotion and connection. I firmly believe that these are the ingredients that will determine which brick and mortar retailers thrive in the future, and which become victims of the current trend.”
Howard S. Schultz – Starbucks Corp.
Competition is a non-event for us
“I would say a few things. First of all, there’s no evidence whatsoever that any national company, even those companies that are discounting coffee significantly, with McDonald’s nationally or Dunkin’ Donuts in New England, what Panera is trying to do, there’s no evidence whatsoever that we have, that there is anything that they are doing that is affecting us adversely. So I just want to get that off the table. The competitive issues question is just a nonevent for us.”