The business day started with a bang on Tuesday, as Chipotle announced that its chairman and CEO, Brian Niccol, had accepted a similar role at Starbucks and will leave the burrito chain at month’s end. Niccol had served as Chipotle’s CEO since 2018.
Chipotle’s board of directors promptly appointed Scott Boatwright, chief operating officer, as interim CEO of a chain with more than 3,500 locations. Meanwhile, Scott Maw, Chipotle’s lead independent director, has been named its new chairman of the board.
“Thanks to our robust talent planning process, we are well-prepared for events like this due to the deep bench within the organization,” Maw noted in a press release.
“I’m incredibly proud of the work that has been accomplished since I joined Chipotle,” Niccol said in a statement. “The strategic priorities this team has put in place have positioned Chipotle to win today and enable future growth.”
Placer.ai noted that Chipotle has seen visits increasing in recent months, “while Starbucks has, comparatively, seen visits falter. As such, it’s easy to see why Niccol was an attractive CEO candidate.”
WHAT’S NEXT FOR STARBUCKS
Starbucks announced that Niccol will assume his new role on September 9. The coffee chain’s CFO, Rachel Ruggeri, will serve as interim CEO in the meantime. Laxman Narasimhan is stepping down from his role as CEO.
In a Starbucks press release, Niccol said he’s “grateful for the opportunity. … I am energized by the tremendous potential to drive growth and further enhance the Starbucks experience for our customers and partners.”
Starbucks’ founder also sounded re-energized after the chain secured the savvy business leadership of Niccol, who currently serves on the board of directors of Walmart Inc.
Niccol’s “track record in delivering extraordinary shareholder value recognizes the critical human element it takes to lead a culture and values driven enterprise,” noted Howard Schultz, currently Starbucks’ chairman emeritus. “I believe he is the leader Starbucks needs at a pivotal moment in its history.”
INDUSTRY REACTIONS
In its analysis of the major business news on Tuesday, Placer.ai noted that, under Niccol’s watch since 2018, Chipotle had been in growth mode. During Q1 and Q2 of 2024, for instance, Chipotle increased year-over-year total revenue by 14.1% and 18.2%, respectively. Starbucks, on the other hand, had seen revenue dip by 2% and 1%, respectively, during the past two quarters.
R.J. Hottovy, Placer.ai’s head of analytical research, said Niccol’s proven track record as an innovator should serve Starbucks well.
“Niccol’s ability to drive visits was apparent during his time at both Taco Bell and Chipotle,” Hottovy said, “spurred by new menu innovations, engaging marketing campaigns, and improved restaurant operations. Chipotle has outperformed the quick-service restaurant space the past several years, and we’d expect new products and advertising campaigns to be a focus early in his tenure at Starbucks.”
CHIPOTLE’S FINAL WORD
Boatwright nevertheless expressed excitement for Chipotle’s planned growth.
“I have the utmost confidence in our five key strategies,” he said. “… Excited for the long-term opportunity to grow to 7,000 restaurants in North America and expand internationally.”
