Starbucks Replaces CEO Amid Sales Decline

Starbucks is undergoing a significant leadership change as CEO Laxman Narasimhan steps down after less than two years in the role. He will be replaced by Brian Niccol, the current head of Mexican grill chain Chipotle, as the coffee giant seeks to address declining sales.

The leadership shake-up comes in response to a slump in Starbucks’ sales, which have been affected by backlash over price increases and boycotts related to the Israel-Gaza conflict. The company’s global sales fell by 3% in the three months ending in June, with weaknesses reported in both the US and China.

Former Starbucks executive Howard Schultz, who played a key role in the company’s growth, expressed confidence in Niccol, describing him as “the leader Starbucks needs at a pivotal moment in its history.” Following the announcement, Starbucks’ shares rose by over 20%.

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Niccol, known for revitalizing Chipotle after food safety crises, faces a complex challenge at Starbucks, where issues such as boycott pressures, value perception, and service speed are more pronounced. Despite recent sales growth post-pandemic, Starbucks has struggled with long wait times, rising prices, and a contentious relationship with unionized staff in the US.

The company has also been caught in the crossfire of geopolitical debates, particularly after a social media post by a Starbucks union expressing solidarity with Palestinians led to global boycott calls. Starbucks has attempted to counter this with a statement condemning violence in the Israel-Gaza region.

The leadership transition marks a critical moment for Starbucks as it seeks to regain lost sales and restore its standing in the global market.

Source BBC