Starbucks introduced on Tuesday that CEO Laxman Narasimhan is stepping down as CEO, efficient instantly, and will likely be changed by Chipotle CEO Brian Niccol.
Starbucks’ Chief Monetary Officer Rachel Ruggeri will function interim CEO till Niccol’s place formally begins on September 9, 2024.
Chipotle CEO Brian Niccol (Robin Marchant/Getty Pictures)
Associated: Laxman Narasimhan Appointed As CEO Of Starbucks
“I’m excited to affix Starbucks and grateful for the chance to assist steward this unbelievable firm, alongside a whole bunch of 1000’s of devoted companions,” Niccol mentioned in a Starbucks investor launch. “As I embark upon this journey, I’m energized by the super potential to drive development and additional improve the Starbucks expertise for our clients and companions, whereas staying true to our mission and values.”
Narasimhan was appointed CEO of Starbucks in September 2022 earlier than starting the function in March 2023.
Niccol has been CEO of Chipotle since 2018 and Chairman of the Board since 2020. Earlier than that, he was CEO of Taco Bell for 3 years.
At Chipotle, Niccol has seen a difficult few months over criticism of inconsistent portion sizes throughout eating places, one thing he addressed on a Q2 2024 name with traders in July.
“There was by no means a directive to supply much less to our clients. Beneficiant portion is a core model fairness of Chipotle. It all the time has been, and it all the time will likely be,” Niccol mentioned. “With that mentioned, getting the suggestions triggered us to relook at our execution throughout our complete system with the intention to all the time serve our friends scrumptious, recent, customized burritos, and bulls with beneficiant parts.”
Nonetheless, the fast-casual chain noticed a powerful Q2, with an 8.7% quarterly enhance in restaurant site visitors and a web revenue of $455.7 million, in comparison with $341.8 million on the identical time final 12 months.
Starbucks’ Altering CEOs
Starbucks has seen numerous turnover within the chief government function over the previous few years, starting with former CEO Kevin Johnson, who stepped down in April 2022. Two-time CEO Howard Shultz stepped again in to serve within the interim till Narasimhan was appointed CEO final fall. Earlier than being named CEO of Starbucks, Narasimhan was the CEO of Reckitt, a client well being, hygiene, and vitamin firm.
Starbucks CEO Laxman Narasimhan attends the 2023 TAAF Annual AAPI CEO Dinner (JP Yim/Getty Pictures for The Asian American Basis (TAAF))
Shultz, who labored in government positions on the firm for over 40 years and holds the title “lifelong Chairman Emeritus,” criticized Narasimhan’s management in a LinkedIn put up in Could following a weak earnings report.
“At any firm that misses badly, there should be contrition and renewed focus and self-discipline on the core. Personal the shortcoming with out the slightest semblance of an excuse,” Shultz wrote, on the time. “Senior leadersβtogether with board membersβmust spend extra time with those that put on the inexperienced apron.”
On Tuesday, Shultz championed Niccol’s appointment in a press release.
Associated: Chipotle CEO Addresses Backlash Over Portion Sizes: ‘There Was By no means a Directive to Present Much less’
“Having adopted Brian’s management and transformation journey at Chipotle, I’ve lengthy admired his management impression,” Shultz mentioned. “I imagine he’s the chief Starbucks wants at a pivotal second in its historical past. He has my respect and full help.”
Former Starbucks CEO Howard Shultz (Leigh Vogel/Getty Pictures for The New York Instances)
Starbucks and Chipotle didn’t instantly reply to Entrepreneur’s request for remark.
Earlier than market opening, Starbucks was up over 13%, whereas Chipotle was down round 10%.
It is a growing story.
