Starbucks, struggling with weak demand and disgruntled investors, said Tuesday that CEO Laxman Narasimhan is stepping down after a little more than a year in the job
Starbucks, struggling with weak demand and disgruntled investors, said Tuesday that CEO Laxman Narasimhan is stepping down after a little more than a year in the job.
The Seattle coffee giant said Brian Niccol, the chairman and CEO of Chipotle, will become Starbucks’ chairman and CEO on Sept. 9.
Starbucks shares jumped more than 13% before the market opened.
Narasimhan, a longtime PepsiCo executive who has also served as the CEO of Reckitt, a U.K.-based consumer health company, became Starbucks’ CEO in March 2023. He succeeded Howard Schultz, the longtime Starbucks leader and chairman emeritus who came out of retirement in 2022 to serve as the company’s interim CEO.
But investors quickly soured on Narasimhan as the company’s sales weakened and it dealt with multiple issues, including competition from lower-cost competitors in China and boycotts in the Middle East and elsewhere due to its perceived support for Israel.
Mellody Hobson, the chair of Starbucks’ board of directors, said Niccol has transformed Chipotle since becoming its CEO in 2018 by focusing 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 said in a statement. “Like all of us at Starbucks, he understands that a remarkable customer experience is rooted in an exceptional partner experience.”
Schultz said he has long admired Niccol.
“I believe he is the leader Starbucks needs at a pivotal moment in its history. He has my respect and full support,” Schultz said in a statement.
Chipotle CEO Brian Niccol has been named the new Chief Executive Officer of Starbucks, taking over from current CEO Kevin Johnson. The announcement comes as Starbucks looks to revamp its business strategy and regain its footing in the highly competitive coffee market.
Niccol, who has been at the helm of Chipotle since 2018, is credited with turning around the struggling fast-casual restaurant chain. Under his leadership, Chipotle has seen a resurgence in sales and customer loyalty, thanks in part to innovative menu offerings and a renewed focus on digital ordering and delivery.
Now, Niccol will bring his expertise in digital marketing and customer engagement to Starbucks, which has faced challenges in recent years as it grapples with changing consumer preferences and increased competition from rivals like Dunkin’ Donuts and McDonald’s.
In a statement announcing Niccol’s appointment, Starbucks Chairman Myron Ullman praised Niccol’s track record of success and his ability to drive growth in a highly competitive industry. “Brian’s proven track record of innovation and customer-centric leadership make him the ideal candidate to lead Starbucks into its next chapter of growth,” Ullman said.
Niccol’s appointment comes at a critical time for Starbucks, which has been hit hard by the COVID-19 pandemic and the resulting economic downturn. The company has had to close hundreds of stores and lay off thousands of employees as it grapples with the impact of the crisis on its business.
In his new role, Niccol will be tasked with reinvigorating Starbucks’ brand and driving growth through new initiatives like expanding its digital ordering and delivery capabilities, introducing new menu items, and enhancing the customer experience in its stores.
Analysts are optimistic about Niccol’s ability to lead Starbucks through this challenging period. “Brian Niccol has a proven track record of success in the restaurant industry, and his experience in turning around a struggling brand like Chipotle bodes well for his ability to lead Starbucks through its current challenges,” said restaurant industry analyst Sarah Anderson.
As Niccol prepares to take the reins at Starbucks, investors and customers alike will be watching closely to see how he plans to steer the coffee giant back on course and position it for long-term success in an increasingly competitive market.
