Starbucks announced a surprising change in leadership, revealing that Chipotle chairman and CEO Brian Niccol will take over as the coffee chain’s new CEO on September 9. This news comes after current CEO Lax Narasimhan’s short tenure of less than 18 months. The decision is seen as a bold move to address the company’s financial struggles and internal chaos.
Starbucks has been facing declining financial results and share prices, with North American transactions dropping by 6% and international sales down 7%. Chinese comparable sales also took a hit, falling by 14%. The company’s operating profits have decreased, and overall, shares have been down 20% over the past five years. This stands in stark contrast to Chipotle, which has seen a 201% increase in its shares during the same period.
The leadership at Starbucks has also been criticized, with founder Howard Schultz openly criticizing Narasimhan on social media. Narasimhan’s performance on a live TV interview further highlighted his lack of preparedness, leading to doubts about his future at the company.
In contrast, Niccol’s track record at Chipotle has been impressive, with the company’s shares skyrocketing by 671% under his leadership. He is seen as someone who could potentially turn things around for Starbucks and address the various crises plaguing the company.
While Niccol will face challenges ahead, his experience and approach are expected to bring much-needed stability and growth to Starbucks. The appointment of Niccol marks a new chapter for the coffee chain as it seeks to regain its footing in the market.
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