In a significant leadership change, Starbucks Corporation has named Brian Niccol, the current CEO of Chipotle Mexican Grill, as its new chairman and CEO. Starbucks’ stock saw a 24.5% increase following the announcement, making it the company’s best day ever.
Niccol, known for his successful turnaround of Chipotle, will take over the reins at Starbucks in early September. His appointment comes as Starbucks faces challenges, including declining sales in its key markets—the U.S. and China. In the most recent quarter, the coffee giant reported a 3% drop in same-store sales.
Laxman Narasimhan, who had been Starbucks’ CEO since March 2023, is stepping down immediately. Weak sales caused the company to operate poorly during his leadership. Additionally, activist investor Elliott Management just bought stock in Starbucks.
Niccol’s task will be to revitalize Starbucks’ sales and restore its position as a premium coffee destination. However, he faces larger and deeper challenges given Starbucks’ global footprint of 38,000 stores compared to Chipotle’s 3,500 U.S.-based restaurants. Convincing U.S. customers to return to Starbucks stores for their premium drinks and addressing issues like long wait times and mobile orders will be key priorities for Niccol.
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