Chipotle chairman and CEO Brian Niccol will become chairman and CEO of Starbucks, effective September 9, 2024. Laxman Narasimhan is stepping down from his role as Starbucks CEO and as a member of its board of directors effective immediately.

Rachel Ruggeri, Starbucks' chief financial officer, will serve as interim CEO until Niccol joins the company. She has been with the company for 23 years and has served as Starbucks' CFO since 2021. Mellody Hobson, Starbucks' board chair, will become lead independent director.

As a result of Niccol’s departure, Chipotle tapped Scott Boatright, its COO, to serve as interim CEO. Boatright has been with Chipotle since 2017. In addition, Jack Hartung, who had announced his intention to retire from Chipotle in 2025, has agreed to remain with the company indefinitely in the newly created role of president of strategy, finance and supply chain. In this role, Hartung will support Boatwright as interim CEO, and continue his current oversight of Adam Rymer, vice president of finance and incoming CFO, as well as Carlos Londono, global head of supply chain. Finally, Scott Maw, Chipotle's lead independent director, has been named chairman of the board, effective immediately.

Niccol joined Chipotle as chief executive officer in March 2018, and became chairman of the board in March 2020. During his tenure, the fast-casual chain has gone through a digital transformation by adding Chipotlanes and through other initiatives. Before joining Chipotle, Niccol served as CEO of Taco Bell. During his time with Taco Bell Niccol also served as chief marketing and innovation officer, and president. He also served in leadership roles at Pizza Hut, another division of Yum! Brands. He began his career in brand management at Procter and Gamble.

Narasimhan joined Starbucks in April of 2023, replacing interim CEO Howard Schultz as part of a Starbucks succession plan that was triggered in 2022. Narasimhan came to Starbucks from Reckitt, a multinational consumer health, hygiene, and nutrition company. And earlier this year under Narasimhan’s leadership, Starbucks updated its leadership to support its international growth plans.

The transition comes at a time when Chipotle and Starbucks’ financial reporting was going in different directions. For example, Starbucks reported global same-store sales declined 3% for its most recent quarter, driven by a 5% decline in comparable transactions. The chain did, however, report a 2% increase in average ticket totals. In contrast, for its most recent quarter, Chipotle reported that same-store sales increased 11.0% and revenues increased 18.2%.

Both chains have also seen different patterns develop in terms of customer traffic. For the last three weeks of July, Starbucks saw customer traffic decline by 7.9%, 12.9% and 12.5%, per data from Placer.ai. To help spark customer traffic, Starbucks recently took the unprecedented step of launching value meals. The Seattle-based coffee company also is rolling out a series of equipment improvements and updates to how team members make craft beverages and food to enhance efficiency at the store level, per a company announcement.

Chipotle, on the other hand, saw traffic increases of 12.9%, 12.7% and 13.4%. The fast-casual Mexican-themed chain is ready to take the next steps in its equipment initiatives. Specifically, the fast-casual Mexican chain plans to further test dual-sided grills in 74 high-volume locations, per a Restaurant Dive report. Its digital makeline is undergoing final checks ahead of pilot testing in some of the chain’s restaurants.

This data explains, in part, why Starbucks will make a leadership change. “Brian Niccol has earned a reputation as one of the top innovators in the restaurant industry today. Niccol’s ability to drive visits was apparent during his time at both Taco Bell and Chipotle, spurred by new menu innovations, engaging marketing campaigns, and improved restaurant operations,” says R.J. Hottovy, head of analytical research at Placer.ai. “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.”