Starbucks Promotes CFO to New Role as E-Commerce Initiative Reinvents CFO to New Role

Starbucks coffee packages are seen at a supermarket in Santa Monica, California, January 27, 2011. STARBUCKS/KRAFT REUTERS/Lucy Nicholson

By Lisa Baertlein

LOS ANGELES (Reuters) – Starbucks Corp. Chief Executive Howard Schultz said on Wednesday he will promote Chief Financial Officer Troy Alstead to a new position as chief operating officer, allowing Schultz to focus on growing the coffee chain’s e-commerce business.

Alstead will take over the operation of brick-and-mortar stores, where traffic rose 4 percent in the quarter that included the holiday season. Starbucks also reported a record $1.4 billion in gift card sales during the quarter.

The company, a leader in mobile payments and digital marketing, has been looking for years for ways to connect and strengthen its sales by combining its coffee shop operations with sales of its products in grocery stores and other retail outlets.

“This is not about succession planning or that I’m planning to leave the company or even thinking about leaving,” Schultz, the Starbucks founder and CEO, told Reuters in a telephone interview.

The increased emphasis on e-commerce, including mobile payments and gift cards, is an opportunity for Starbucks to “create new revenue and profit channels beyond the four walls of stores … in the face of radical changes” in the way consumers shop, Schultz said.

The new initiative includes projects related to mobile payments, Schultz said, without giving details.

Seattle-based Starbucks is an investor in Square, a mobile payments provider. Asked if Starbucks plans to buy the company, which processes mobile payments for Starbucks and other retailers, Schultz said Wednesday’s announcement was not about an acquisition.

Schultz said future programs will include “using Starbucks currency at other points of sale outside of Starbucks.”

Starbucks already lets users of its loyalty and payment cards earn “stars” — or points — when they buy coffee at a participating grocery store. Those stars can then be redeemed at a Starbucks store.

(Reporting by Lisa Baertlein in Los Angeles; Editing by David Gregorio)