Business World

Thursday 22 August 2019

Who the f@#! is Howard Schultz?

The Starbucks boss provoked an extraordinary response when he dared to criticise the state of the British economy

(L-R) Starbucks boss Howard Schultz and British Business Secretary Lord Mandelson <b>Photos:</b> Getty Images
(L-R) Starbucks boss Howard Schultz and British Business Secretary Lord Mandelson Photos: Getty Images

Martin Hickman and Nigel Morris

British Business Secretary Lord Mandelson's famed silver tongue deserted him recently when he launched a four-letter tirade against one of America's most senior entrepreneurs, Starbucks boss Howard Schultz.

The American, chief executive of the world's biggest coffee chain, spoke of his corporation's recent struggles in a television interview. "The concern for us is western Europe and specifically the UK," he said. "The UK is in a spiral." Mr Schultz described consumer confidence in Britain was "very, very poor".

The furious Lord Mandelson resorted to an uncharacteristic Anglo-Saxon turn of phrase, storming at a cocktail party in New York: "Why should I have that guy running down the country? Who the f@#! is he?"

Lord Mandelson added a withering comment on Starbucks' assessment of the UK economy, adding: "How the hell are they doing?"

Starbucks plans to close 900 of its 16,000 outlets worldwide as consumers buy fewer premium-priced lattes and mochas.

Lord Mandelson, on a brief visit to New York to bang the drum for British business, overheard an interview by the normally-careful Mr Schultz, and the Business Secretary's face reddened.

In a public interview on the CNBC TV station, he used less fragrant language but was no less damning in his comments: "The UK is not spiralling, although I have noticed that Starbucks is in a great deal of trouble. But that may be because of their over exposure given the state of the market. So please do not project Starbucks on to the UK economy as a whole."

As communications chief of the Labour Party in the mid-1990s, Lord Mandelson guided Tony Blair to power in 1997 by softening the party's image, famously introducing its red rose emblem and backing well-groomed politicians to represent the party on television. As Northern Ireland Secretary and Trade Secretary, his delivery was rarely less than polished, in public at least, and he has continued to be an exemplar of diplomacy since he returned to the Cabinet last year.

He was less guarded at an official reception at the British consul's residence in New York, where he swore about the company, which has two million customers and 713 stores in Britain.

Lord Mandelson, in the US to counter the fears of investors who were receiving too gloomy a picture about Britain's economic prospects, was unrepentant about his outburst, although he conceded he did not need to swear.

His spokesman told The Independent: "We stand by the statement, but we don't stand by the language."

Starbucks later said that Mr Schultz had not intended to do down Britain, which is its third biggest market after the US and Canada.

However, its stores have been undercut by cheaper fast-food outlets and pub chains, which have made a pitch for the mid-morning coffee break with cheap filter coffee. Starbucks also faces competition from rival chains and, unlike in the US, it is not the biggest coffee corporation in Britain, with fewer outlets than Costa Coffee.

A spokeswoman for Starbucks said: "In the UK we haven't confirmed any news of closures. What we are doing at the moment is reviewing the portfolio of stores."

After hearing Starbucks' statement, Lord Mandelson said: "I'm glad Mr Schultz has stepped back from his remarks. I made my point and I regard the matter as closed."

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