Starbucks Gets New CEO from Chipotle

In a big shake-up, Starbucks has announced that Brian Niccol, the current CEO of Chipotle, will take over as their new CEO starting September 9. This change comes as Starbucks faces some challenges, including slowing sales and pressure from activist investors.

Starbucks’ current CEO, Laxman Narasimhan, is stepping down immediately, making way for Niccol. Until then, the company’s CFO, Rachel Ruggeri, will serve as the interim CEO. Meanwhile, Mellody Hobson, who chairs the board, will take on the role of lead independent director.

During Brian Niccol’s time at Chipotle, the chain saw incredible growth, with revenue nearly doubling and profits skyrocketing. The company’s stock also rose by a staggering 800% under his leadership. Before Chipotle, Niccol held various roles at Taco Bell and Pizza Hut, both part of Yum Brands.

The change in leadership comes as Starbucks has been dealing with a drop in store traffic and competition from lower-cost coffee options, especially in China. Earlier this year, the coffee giant experienced its first drop in quarterly revenue since 2020, leading to concerns about its performance.

Activist investor Elliott Investment Management has been pushing for changes at Starbucks and has welcomed Niccol’s appointment, considering it a step forward for the company. They believe that Niccol’s proven track record could help Starbucks reach its full potential.

Starbucks saw its stock rise by over 21% following the announcement of Niccol’s new role, bouncing back from a tough year that had seen shares fall by almost 20% before this news.

On the flip side, Chipotle’s stock took a hit, dropping nearly 13% after the announcement, reflecting the market’s concern about losing a successful CEO like Niccol.