Starbucks Replaces CEO Laxman Narasimhan With Chipotle CEO Brian Niccol
Starbucks announced Tuesday it’s replacing CEO Laxman Narasimhan with Chipotle CEO Brian Niccol, CNBC reports. Narasimhan’s departure is effective immediately. Starbucks CFO Rachel Ruggeri will step in as interim chief executive until Sept. 9, when Niccol officially assumes the top job. The coffee giant’s performance has struggled this year, hurt by weak sales in the U.S. and China, its two largest markets. In its latest quarter, Starbucks reported a 3 percent decline in same-store sales.
Niccol has served as Chipotle’s CEO since 2018, and previously led Yum Brands’ Taco Bell. During his time at Chipotle, its stock soared 773 percent. “I believe he is the leader Starbucks needs at a pivotal moment in its history. He has my respect and full support,” former Starbucks CEO Howard Schultz said in a statement.
Total Retail's Take: Narasimhan was handpicked as Starbucks' chief executive by former long-time leader Schultz and took over in March 2023. Before taking the helm of the coffee giant, he was the CEO of Lysol owner Reckitt. It seems that just one year into Narasimhan's tenure, Starbucks' board began to rethink its leadership. Mellody Hobson, who stepped down as Starbucks chair to become lead independent director as part of Tuesday’s shakeup, said the board had been thinking about replacing Narasimhan for several months, according to CNBC.
Pressure mounted on Starbucks after a surprise decline in sales earlier this year. In May, former long-time leader Shultz wrote an open letter highlighting the coffee chain's challenges. Activist investor Elliott Management also acquired a stake in the company worth as much as $2 billion in July and began talks with management. But the leadership shakeup doesn't point to Starbucks' board bending to activist pressure. The hedge fund recently proposed a settlement that would keep Narasimhan as CEO, which Starbucks rebuked with its appointment of Niccol. The board hadn’t told Elliott about its leadership shakeup ahead of time, Hobson told CNBC.
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.
