Leadership change at Starbucks

By: Trademagazin Date: 2024. 08. 16. 11:37

The world’s best-known coffee chain, Starbucks, appointed a new CEO in mid-August, which not only attracted the attention of the business press, but also received special attention due to the extraordinary size of the certification package. Brian Niccol, who was lured from the Tex-Mex fast food chain Chipotle, will become the company’s fourth CEO in three years. The new CEO’s compensation package may reach $113 million, making him one of the highest-paid CEOs in the United States.

Niccol’s task will not be easy, as Starbucks faces serious challenges. The outgoing Laxman Narasimhan led the company for just 512 days, during which time the company faced many problems. The stock price bottomed out in 2022 as a result of China’s Covid lockdowns, inflationary pressures and successful unionization of workers.

The company’s 2024 financial results were particularly weak, with the US market seeing a 2 percent decline in revenue despite a 4 percent increase in average order prices.

News of Niccol’s appointment sent Starbucks’ stock price soaring, adding $19 billion to the company’s market value. Based on his success at Chipotle, Niccol’s efficiency measures could be the hope for Starbucks, which is struggling in this area right now.

The new CEO’s challenges include reducing increased wait times, the price sensitivity of American consumers and managing union conflicts. In addition, Starbucks also experienced a significant decline in the Chinese market, partly due to increasing local competition.

However, Brian Niccol’s successful career and the optimism towards the management of Starbucks also strengthens the confidence of shareholders and the market, so all eyes are on whether he will be able to solve the challenges facing the company.
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