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Starbucks introduced on Tuesday that CEO Laxman Narasimhan is stepping down as CEO, efficient instantly, and might 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 Photographs)
Associated: Laxman Narasimhan Appointed As CEO Of Starbucks
“I’m excited to affix Starbucks and grateful for the chance to assist steward this unimaginable firm, alongside tons of of hundreds 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 progress and additional improve the Starbucks expertise for our prospects 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 challenging few months over criticism of inconsistent portion sizes across eating places, one thing he addressed on a Q2 2024 name with traders in July.
“There was by no means a directive to offer much less to our prospects. Beneficiant portion is a core model fairness of Chipotle. It all the time has been, and it all the time might be,” Niccol said. “With that mentioned, getting the suggestions triggered us to relook at our execution throughout our total system with the intention to all the time serve our company scrumptious, contemporary, customized burritos, and bulls with beneficiant parts.”
Nonetheless, the fast-casual chain noticed a strong Q2, with an 8.7% quarterly improve in restaurant visitors and a web revenue of $455.7 million, in comparison with $341.8 million on the similar time final 12 months.
Starbucks’ Altering CEOs
Starbucks has seen quite a lot of turnover within the chief government function over the past 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 shopper well being, hygiene, and vitamin firm.
Starbucks CEO Laxman Narasimhan attends the 2023 TAAF Annual AAPI CEO Dinner (JP Yim/Getty Photographs 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 Might 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 leaders—together with board members—must spend extra time with those that put on the inexperienced apron.”
On Tuesday, Shultz championed Niccol’s appointment in a statement.
Associated: Chipotle CEO Addresses Backlash Over Portion Sizes: ‘There Was Never a Directive to Provide Less’
“Having adopted Brian’s management and transformation journey at Chipotle, I’ve lengthy admired his management affect,” 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 Photographs 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%.
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