USA – American multinational chain of coffeehouses and roasters, Starbucks, has welcomed its new CEO from international chain of fast casual restaurants, Chipotle, in as part of business restructuring process.
Laxman Narasimhan has stepped down immediately after just a year in the role, and is replaced with Brian Niccol from Chipotle, effective September 9. CNN describes the Niccol as corporate fix-it man.
Starbucks chief financial officer, Rachel Ruggeri, will serve as interim CEO until that time. Mellody Hobson, Starbucks board chair, will become lead independent director.
Narasimhan, who is also leaving the board, took over Starbucks in March 2023 and has seen the coffee chain largely struggle under his purview.
Most recently, the chain’s sales dropped 3% globally at stores open for at least a year, including a 2% drop in its home North America market.
Starbucks’ struggles reflect consumer fatigue with high prices at food chains, restaurants and stores after years of price hikes.
They also reveal cracks in Starbucks’ business model, which has changed in response to customer demand from a predominantly sit-down coffee shop to a mostly drive-thru and mobile takeout chain.
However, the coffeehouse is grateful to Narasimhan for improving the Starbucks partner experience, drove significant innovation in its supply chain, and enhanced the store operations.
“On behalf of the board, I want to sincerely thank Laxman for his contributions to Starbucks, and his dedication to our people and brand,” said Hobson.
“In the face of some challenging headwinds, Laxman has been laser focused on improving the business to meet the needs of our customers and partners. We all wish him the very best and know he will do great things in the future.”
Niccol, who will leave Chipotle on August 31, currently serves on the board of directors of Walmart Inc. He previously served on the board of KB Home and Harley-Davidson.
He has a rich background in fast food, including a stint as CEO of Taco Bell from 2015 to 2018, prior to joining rival Chipotle. He’s also held various executive positions at Pizza Hut, another chain owned by Yum! Brands, before joining Taco Bell.
Niccol said that “it’s hard to leave such a great company and all of the talented people I’ve had the pleasure to work with, but I depart knowing the business is in great shape and poised for growth with a strong, experienced leadership team.”
The Chipotle chain’s chief operating officer, Scott Boatwright, will become its interim CEO until new appointment is made.
R.J. Hottovy, head of analytical research at Placer.ai, said in a note that Niccol’s ability to drive visits was apparent during his time at both Taco Bell and Chipotle, spurred by new menu innovations, engaging marketing campaigns, and improved restaurant operations.
Liked this article? Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE
