Starbucks Names Chipotle’s Brian Niccol as New CEO Amid Sales Slump
Starbucks announced on Tuesday that it will replace Chief Executive Officer Laxman Narasimhan with Brian Niccol, the current chairman and CEO of Chipotle, effective September 9, following a significant downturn in the coffee giant’s sales. This leadership change comes as Starbucks faces falling demand in its two largest markets, the United States and China.
According to Philippines News Agency, Narasimhan will step down immediately, paving the way for Niccol to take over leadership next month. This strategic shift follows a troubling period for Starbucks, marked by a 2 percent decline in North America store sales and a similar downturn in U.S. store sales during the April-June quarter of 2024. The company’s recent financial results statement, released on July 30, highlights these challenges, noting only a modest 1 percent revenue increase in North America, while international revenues fell nearly 7 percent to USD 1.84 billion from USD 1.97 billion year-over-year.
Starbucks, which operates stores that account for 61 percent of its global portfolio in the U.S. and China, has also been impacted by a boycott targeting international companies seen as supporting Israel. The boycott has contributed to weaker financial performance, with Starbucks reporting a revenue dip of 2 percent in the January-March period and a further 0.6 percent decrease in the subsequent quarter.
Before his tenure at Chipotle, Niccol held the position of CEO at Taco Bell and has served in leadership roles at Pizza Hut, another Yum! Brands division. He also currently serves on the board of directors at Walmart.
The announcement of Niccol’s appointment led to a notable 21.4 percent rise in Starbucks shares on the Nasdaq following the news.