Starbucks' CEO, Laxman Narasimhan, is stepping down from the position after less than a year. This Indian-American business executive was ousted from his post since he didn't work after 6 p.m.
Therefore, Chipotle's CEO, Brian Niccol, has been appointed as the new CEO of Starbucks. He will replace both Laxman Narasimhan, the current CEO, and Mellody Hobson, the current chairman of Starbucks. Niccol will officially take on the new role on August 13, 2024.
Since Laxman Narasimhan didn't work after 6 p.m., the board felt confident that Brian Niccol was the right choice for the position. He will be the fourth CEO of Starbucks in these two years.
Niccol's extensive experience in the food and beverage industry, particularly his successful tenure at Chipotle, made him a strong candidate for the role. His leadership skills and strategic vision are expected to bring positive changes to Starbucks.
Why did Narasimhan leave?
Source: Fortune
Laxman Narasimhan is an Indian-American business executive and former CEO of The Reckitt Benckiser Group and Starbucks.
Recently, he was replaced by Brian Niccol, who will be taking over the leadership role at Starbucks. Niccol brings a wealth of experience in the food and beverage industry, having previously served as CEO of Chipotle Mexican Grill.
Laxman Narasimhan was fired from the role of CEO of Starbucks due to a decline in company performance and strategic direction under his leadership.
The sudden leadership change comes amid declining stock prices and ongoing talks with activist investor Elliott Investment Management.
In addition to shrinking U.S. sales, competition from budget-friendly competitors like Luckin Coffee has eroded Starbucks' market share and sales in China, its second-largest market.
Neil Saunders, a retail analyst and managing director at GlobalData Retail, added that Starbucks has been losing market share to smaller, independent coffee shops and other competitors for some time, and Narasimhan's failure to address these issues effectively has frustrated investors.
He further mentioned that Niccol's extensive experience in the food service industry would be valuable as Starbucks faces a range of challenges, including rising costs, labour problems, operational inefficiencies, and growing customer dissatisfaction.
Another likely reason for Narasimhan's departure was dissatisfaction from former Starbucks CEO Howard Schultz, who harshly criticised his successor's leadership in a viral LinkedIn letter in May, stating that the company's U.S. operations were the "main cause of the company's decline.
Who is Brian Niccol?
Source: Fortune
Brian Niccol is the chief executive officer of Starbucks. He took over the position on August 13, 2024. Earlier, he was Chipotle's CEO, the same company for which 22 people were hospitalised due to food poisoning in 2015.
Under Niccol's leadership, Chipotle had a significant turnaround in sales and customer perception. This gentleman from the USA helped the brand double Chipotle's revenue while its profits increased almost seven times.
Chipotle's stock price increased nearly eightfold under Niccol's leadership, making him one of the most successful CEOs in the fast-food industry. He expanded the menu, improved the digital ordering system, and implemented a rewards programme, and the stock has increased by over 800%.
He joined Chipotle in 2018 after a successful tenure at Taco Bell, where he was credited with introducing popular menu items and driving growth for the brand. He has worked with Pizza Hut, another fast food giant, and has a proven track record of revitalising struggling brands in the industry.
He said, "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."
According to Chipotle, Niccol will leave on August 31, and the chain's chief operating officer, Scott Boatwright, will take over as interim CEO.
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