Newport Beach (TIP)- Starbucks, struggling with weak demand and disgruntled investors, said Tuesday that CEO Laxman Narasimhan is stepping down after a little more than a year in the job. The Seattle coffee giant said Brian Niccol, the chairman and CEO of Chipotle, will become Starbucks’ chairman and CEO on September 9.
Starbucks shares jumped more than 13 per cent before the market opened.
Narasimhan, a longtime PepsiCo executive who has also served as the CEO of Reckitt, a UK-based consumer health company, became Starbucks’ CEO in March 2023. He succeeded Howard Schultz, the longtime Starbucks leader and chairman emeritus who came out of retirement in 2022 to serve as the company’s interim CEO.
But investors quickly soured on Narasimhan as the company’s sales weakened and it dealt with multiple issues, including competition from lower-cost competitors in China and boycotts in the Middle East and elsewhere due to its perceived support for Israel.
Mellody Hobson, the chair of Starbucks’ board of directors, said Niccol has transformed Chipotle since becoming its CEO in 2018 by focusing on menu innovation, operational excellence and digital transformation.
“Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth,” Hobson said in a statement.
“Like all of us at Starbucks, he understands that a remarkable customer experience is rooted in an exceptional partner experience.” Schultz said he has long admired Niccol. “I believe he is the leader Starbucks needs at a pivotal moment in its history. He has my respect and full support,” Schultz said in a statement.