- Starbucks CEO Laxman Narasimhan has stepped down effective immediately.
- Brian Niccol, the current CEO of Chipotle, will replace Narasimhan in early September.
- This leadership change comes as Starbucks works to turn around its business.
Starbucks announced Tuesday that its CEO, Laxman Narasimhan, will step down effective immediately.
Narasimhan, who took on the role in March 2023, will be replaced by Brian Niccol, who currently heads the fast-casual chain Chipotle.
The news comes as Starbucks looks to turn around its business amid faltering sales in recent months. The chain has also faced pressures from activist investors to address how it is run.
In its most recent quarterly results, same-store sales declined 3% globally and 2% in North America.
"There is a sense that Starbucks has been on the back foot for too long and that it has lost sight of the basics. This has led to a poor performance, particularly in the US," Neil Saunders, managing director of GlobalData Retail, said in a note to clients early Tuesday.
"While some of the slowdown can be attributed to a more sluggish consumer cutting back, much is also the result of a worsening store experience and a lack of innovation in areas like food.
"Because of this Starbucks has been losing share to smaller, independent coffee shops and other rivals for a while, and the failure of Narasimhan to address this convincingly has irked investors," he said.
Meanwhile, rival chain Chipotle has been performing well in recent months even as consumer spending shows signs of slowing in the US.
"Niccol's deep foodservice experience will be useful as Starbucks navigates a cocktail of challenges including increased costs, labor issues, operational inefficiency, and a growing dissatisfaction among customers," Saunders wrote.