Chipotle CEO Takes the Helm at Starbucks Amidst Struggles

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Starbucks, facing sluggish demand and dissatisfied investors, announced on Tuesday that CEO Laxman Narasimhan is stepping down after holding the position for just over a year.

The Seattle-based coffee giant revealed that Brian Niccol, chairman and CEO of Chipotle Mexican Grill, will assume the roles of chairman and CEO of Starbucks, effective Sept. 9.

Starbucks shares surged more than 13% before the market opened.

Narasimhan, a veteran PepsiCo executive who also served as CEO of Reckitt, a UK-based consumer health company, became Starbucks’ CEO in March 2023. He succeeded Howard Schultz, the long-time Starbucks leader and chairman emeritus, who returned from retirement in 2022 to serve as the company’s interim CEO.

However, investors quickly lost confidence in Narasimhan as the company’s sales declined and it grappled with various challenges, including competition from cheaper rivals in China and boycotts in the Middle East and other regions due to its perceived support for Israel.

Mellody Hobson, chair of Starbucks’ board of directors, highlighted Niccol’s transformative leadership at Chipotle since becoming CEO in 2018, emphasizing his focus on menu innovation, operational excellence, and digital transformation.

“Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth,” Hobson stated. “Like all of us at Starbucks, he understands that a remarkable customer experience is rooted in an exceptional partner experience.”

Schultz expressed his long-standing admiration for Niccol.

“I believe he is the leader Starbucks needs at a pivotal moment in its history. He has my respect and full support,” Schultz stated.