Introduction
Starbucks ,The revolving door of Starbucks leadership continues as the company struggles with declining sales. Laxman Narasimhan is stepping down with immediate effect after a year as CEO, as announced on Tuesday. In his place, the company appointed Chipotle CEO Brian Nicol as its new chairman and CEO, effective September 9.
Nichol who is earmarked to be Starbucks’ fourth chief executive in two years has received plaudit for his stewardship at Chipotle since 2018 where he has overseen value and growth. One of the best performers at Chipotle, he increased top-line by almost 800% while at the helm of the company. New chief independent director of Starbucks, Melody Hobson stated that she has confidence in Nicole to steer innovation and growth at Starbucks
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Starbucks shares rose by 18.7% immediately after the announcement and closed the year in the green despite being down for the year, as was Chipotle, which was down 8.7%.
Narasimhan, who has been heading Starbucks since March 2023, saw the company losses deepen, global comparable store sales declined by 3% with a 2% decline in North America. The final competitive pressures that the company was grappling with included customer indigestion on the higher prices that came with the then sit-down coffee shops, new models of selling coffee including drive-thru and mobile takeout.
Nichol who oversaw the restoration of Chipotle after the_E_coli scare added variety to the foods offered, enhanced the ordering via online, and revived the reward system besides increasing the company’s stocks. His past jobs include leading Taco Bell and Pizza Hut.
Nicole will takeover from Narasimhan in the course of the on-going negotiations with Elliott Investment Management, an activist investor, besides low-cost competitors including Lakin Coffee from China. Neil Saunders of the retail analysis noted that Narasimhan had never dealt with escalating market share, as well as the store experience problem that led to his dismissal. Howard Schultz, the former chief executive of Starbuck, was equally unimpressed with Narasimhan and attributed the difficulties of Starbucks to woeful management of its operations in the United States.
As a man with a considerable experience in the food service industry, he is supposed to solve typical problems, such as increase in prices, work conflicts, or low productivity and bring novelties to save Starbucks, for example, new services and promotions.
Starbucks CEO out. Brian Nicol of Chipotle is taking over
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