Starbucks announces CEO stepping down following poor performance
Date
8/15/2024 3:00:19 AM
(MENAFN) American Starbucks announced on Wednesday that Laxman Narasimhan would step down from his position immediately, after only a year in the role, as the company grapples with performance challenges, according to a Turkish news agency. Starbucks revealed in a statement that Brian Niccol, CEO of Chipotle, has been appointed as the new chairman and CEO, effective September 9.
Niccol, who has successfully led the Mexican-inspired food chain since 2018, will become Starbucks' fourth CEO in just two years. These leadership changes occur as Starbucks faces significant challenges, particularly due to boycotts in various parts of the world following accusations of supporting Israel, which has been engaged in conflict with the Gaza Strip since October 7.
Starbucks' stock had declined by 17.8 percent from the beginning of this year until the eve of Narasimhan’s departure, falling to USD77 per share by the close of trading on Monday, compared to over USD96 at the end of 2023. However, the stock surged 24 percent in Tuesday’s session following the announcement of Niccol’s appointment, a rise attributed to his successful track record at Chipotle.
Since the last quarter of the previous year, Starbucks has seen a 3 percent drop in global sales at its open stores, including a 2 percent decline in its North American market. These struggles highlight consumer fatigue with the high prices at food chains, restaurants, and stores, after years of price increases. In March, a Saudi state-run TV channel reported that Alshaya Group, the Gulf retail giant that owns the Starbucks franchise in the Middle East, planned to lay off over 2,000 employees due to a consumer boycott linked to the Gaza conflict.
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