Starbucks’s New CEO Has Tall Orders to Fill

The prospect of union drives at its thousands of US coffee shops may be the most visible challenge facing Laxman Narasimhan when he takes over the world’s largest coffee chain on April 1, but it’s hardly the only one. A global economic slowdown, shipping disruptions and coffee price fluctuations are among the uncertainties sure to be front and center for the new chief executive officer—especially since Starbucks Corp. founder Howard Schultz, who’s twice returned from retirement to replace earlier successors who faltered, will remain on the board to keep an eye on the transition.

“The restaurant industry is facing challenges—labor, commodities, the consumer environment,” says Credit Suisse Group AG analyst Lauren Silberman. In Starbucks’s largest market, North America, there’s already evidence that many consumers are slowing their purchases, especially for things considered discretionary, like dining out. About 60% of shoppers have already cut expenditures because of higher prices, and more plan to scale back in the year ahead, according to a November report from the University of Michigan’s Surveys of Consumers.