In a major shakeup, Starbucks has poached Chipotle’s top dog, Brian Niccol, to take over as CEO, marking a swift change in leadership as the coffee giant battles declining sales, criticism from conservatives, and pressure from activist investors.
Niccol, who’s been leading Chipotle since 2018, will step into his new role at Starbucks on September 9. Current CEO Laxman Narasimhan has been shown the exit after just 16 months at the helm, making him the shortest-serving leader in the modern history of Starbucks.
Starbucks has been under fire from conservatives, who have criticized its extreme promotion of diversity, equity, and inclusion (DEI) ideology as well as a corporate strategy that often appears to be bent around leftwing climate change priorities. It is often described as a prime example of “woke capitalism.”
Starbucks’ stock shot up 22 percent in early trading Tuesday following the announcement, while Chipotle shares took a hit, dropping about 12 percent.
The Seattle-based coffee kingpin has been struggling to keep its mojo. Sales have been slipping, and the company even slashed its financial outlook twice this year as foot traffic in its cafes dwindled. Starbucks is also feeling the heat from tougher competition in China, one of its biggest growth markets.
Since Narasimhan took over in March 2023, Starbucks shares have plummeted more than 20 percent, while the S&P 500 has surged more than 30 percent. Narasimhan was a longtime PepsiCo executive and chief of a U.K. based consumer health company before joining Starbucks.
The CEO switcheroo comes as Starbucks continues to spar with activist investors, including Elliott Investment Management and Starboard Value, who have been pushing for changes to boost the company’s lagging performance.
Chipotle, meanwhile, announced that Niccol will leave at the end of August, with chief operating officer Scott Boatwright stepping in as interim CEO. The company’s long-serving CFO, Jack Hartung, will stay on as president of strategy, finance, and supply chain to help guide Chipotle through this transition.
Niccol’s tenure at Chipotle was marked by impressive growth, even as other chains struggled to keep customers coming through the door as inflation has driven food prices ever higher. Despite raising prices, Chipotle’s sales soared, although some customers have grumbled about shrinking burritos and bowls.
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