Starbucks, faced with declining demand, changed bosses

by time news

2024-08-13 13:59:34

The chain announced on July 30 that the change for the third quarter of its fiscal year was lower than expected, because the decrease in the number of transactions was not compensated for by the increase in prices.

The American coffee giant Starbucks, which has suffered a decline in activity for several months in a context of rising costs and pressure from shareholders, announced on Tuesday the departure with immediate effect of its boss Laxman Narasimhan, in the office for sixteen months. He must be replaced from September 9 by the boss of the Mexican fast food chain Chipotle, Brian Niccol.

«Brian brings a wealth of experience and a proven track record when it comes to innovation and growth», Mellody Hobson, President of the board of directors, said in a press release. “Our board believes you can be a transformative leader for our company“, he added. In electronic trading before the opening of the New York Stock Exchange, Starbucks shares rose 15.02%.

Less change

Several activist investment companies have recently taken stakes in the capital, demanding changes in regulation, according to American media. The chain announced on July 30 that the change for the third quarter of its fiscal year was lower than expected, because the decrease in the number of transactions was not compensated for by the increase in prices. On a similar number of stores, it suffered a drop of 3%, weighted by a 5% drop in business which was only partially offset by a 2% increase in the average ticket.

Laxman Narasimhan, 57, was appointed in September 2022 to be the CEO of Starbucks but has worked for six months with the historical boss of the company, Howard Schultz. The latter has in fact temporarily taken the leadership of the group in the spring of the year – four years after his departure – when his successor, Kevin Johnson, retired. Mr. Schultz left general management in March 2023 and resigned his seat on the board of directors in September, while remaining chairman emeritus of the group.

Prior to joining Starbucks, Mr. Narasimhan was CEO of UK health and hygiene group Reckitt Benckiser and has previously held various senior management positions at PepsiCo Group.

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