Starbucks has announced that it is replacing its CEO with Chipotle’s current CEO, Brian Niccol, who will take over next month. Laxman Narasimhan, who had been with Starbucks for less than two years, will be leaving the company. The news caused Starbucks’ shares to rise by 14% in premarket trading.
Starbucks has been struggling with weak sales in the U.S. and China, as well as customer complaints about declining service quality and rising prices. The company has also been under pressure from activist investors pushing for changes. Ironically, Chipotle has faced similar criticisms, but Starbucks praised Niccol for his leadership in transforming the Mexican-style chain.
Niccol is credited with driving significant growth and value creation at Chipotle, increasing the stock price by nearly 800% during his tenure. Starbucks CFO Rachel Ruggeri will serve as interim CEO until Niccol officially takes over. Chipotle’s COO, Scott Boatwright, will serve as interim CEO of the burrito chain, while CFO Jack Hartung will stay on as president of strategy, finance, and supply chain.
This move comes as both Starbucks and Chipotle face challenges in the competitive food and beverage industry. The impact of Niccol’s leadership on Starbucks’ future performance remains to be seen, but the company is hopeful that his experience at Chipotle will help drive growth and innovation within the coffee giant.
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