Starbucks is facing a huge crisis -- and the CEO refuses to say how he's going to solve it

Starbucks is facing a huge crisis, and the CEO refuses to offer any specifics on how he's going to solve it.

The coffee chain's stores are being inundated with mobile orders, and that's drastically slowing down service and alienating customers. Transactions, a measure of customer traffic, dropped 2% in the most recent quarter, according to the company.

Starbucks' shares fell more than 4% Friday morning.

Starbucks CEO Howard Schultz went on CNBC Friday to address the problem.

"It will be fine," he said, assuring repeatedly that the company would solve the issue. "I'm not really worried. I know that the market has over-reacted."


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When asked for specific solutions, like whether he would rearrange the stores or hire more people to handle the bottleneck of orders, he demurred and reiterated the the company would find a fix.

"We are facing this congestion problem and the anxiety of the customer," he said. "It is a problem that we will solve. It won't take us that long. We have been on it now for 30 days, and in the quarters that follow we will get back to the experience that you have come to expect."

In some ways it's a good problem to have, as it highlights the growing popularity of Starbucks' mobile order-and-pay program. But the negative impact to service has already dragged down customer traffic, and that could become a permanent issue if Starbucks doesn't find a fast fix.

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Former Starbucks executive chairman Howard Schultz
Starbucks Chairman and CEO Howard Schultz appears on the Fox Business Network's Opening Bell with Maria Bartiromo television program in New York City, November 6, 2014. REUTERS/Mike Segar (UNITED STATES - Tags: BUSINESS FOOD)
Howard Schultz, chief executive of Starbucks, poses for a portrait at his new Teavana store in New York, October 23, 2013. Starbucks Corp, which has doubled down on its tea bet, is opening its first Teavana tea bar in New York City this week, aiming to do for tea, the world's second most popular beverage after water, what it has done for coffee. REUTERS/Carlo Allegri (UNITED STATES - Tags: BUSINESS FOOD)
Starbucks Corp Chief Executive Howard Schultz, pictured with images from the company's new "Race Together" project behind him, speaks during the company's annual shareholder's meeting in Seattle, Washington March 18, 2015. Schultz has deftly navigated thorny issues such as gay marriage, gun control and Congressional gridlock, but his move to weigh in on U.S. race relations has brewed up a social media backlash. The company kicked off the discussion when it published full-page ads in major U.S. newspapers earlier this week with the words "Shall We Overcome?" at center page and "RaceTogether" and the Starbucks logo near the bottom. REUTERS/David Ryder (UNITED STATES - Tags: BUSINESS)
Starbucks Chief Executive Howard Schultz speaks during the company's annual shareholder's meeting in Seattle, Washington March 18, 2015. Starbucks Corp will begin offering delivery in New York City and Seattle later this year, when it also plans to expand mobile order and pay services across the United States. REUTERS/David Ryder (UNITED STATES - Tags: BUSINESS)
Howard Schultz, Chairman and CEO of Starbucks, attends a dinner reception for Chinese President Xi Jinping in Seattle, Washington September 22, 2015. Xi landed in Seattle on Tuesday to kick off a week-long U.S. visit that will include meetings with U.S. business leaders, a black-tie state dinner at the White House hosted by President Barack Obama and an address at the United Nations. REUTERS/Jason Redmond
Howard Schultz CEO of Starbucks poses during an interview with Reuters in Shanghai April 19, 2012. Starbucks Corp wants to make its mainland China expansion a family affair. The world's biggest coffee chain is opening cafes in China at a rate of one every four days in its quest to expand from about 570 shops today to more than 1,500 by 2015. REUTERS/Carlos Barria (CHINA - Tags: BUSINESS COMMODITIES)
Starbucks CEO Howard Schultz speaks to shareholders about the company's partnership with the Keurig single-serve coffee brewing machine, at the company's annual meeting of shareholders in Seattle, Washington March 23, 2011. REUTERS/Robert Sorbo (UNITED STATES - Tags: BUSINESS)
Starbucks Chief Executive Howard Schultz talks to shareholders at the Starbucks Annual Shareholders meeting at McCaw Hall in Seattle, Washington March 19, 2008. REUTERS/Marcus R. Donner (UNITED STATES)
Starbucks Chief Executive Howard Schultz speaks during an interview in Tokyo April 13, 2010. Starbucks plans to sell its Via brand instant coffee in grocery stores and other retail channels outside its own outlets in Japan in the future, Schultz said. To match interview STARBUCKS/JAPAN REUTERS/Yuriko Nakao (JAPAN - Tags: BUSINESS HEADSHOT)
Howard Schultz, the President of Starbucks Coffee Company takes a sip of coffee as he assists in the opening of his first coffee house in Paris, January 15, 2004. The coffee house is situated on Avenue de l'Opera at the heart of Paris' tourist district. REUTERS/Charles Platiau PP04010041 MAL/WS

Starbucks is also facing pressure from declining traffic to shopping malls and restaurants, as customer shopping habits change and people increasingly choose to eat at home.

But Schultz insisted that Starbucks is immune to that industry-wide trend because, unlike department stores, the coffee chain provides an emotional experience for consumers, he said.

"Unlike a department store, unlike the apparel business, Starbucks is not going to be affected by the downturn in traffic, which will be significant and have an adverse effect on the overall retail and restaurant sector," he said.

With that experience now being dampened by long lines and delays in stores, it remains to be seen whether Starbucks' customer traffic will bounce back.

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