The CEO of Chipotle Mexican Grill is moving over to Starbucks, the coffee chain announced on Tuesday.

Brian Niccol, who has held the top position at Chipotle since 2018, will take the helm of Starbucks next month, the company said. He will replace Laxman Narasimhan, whose relatively brief tenure began in March last year, when he became the first CEO to come from outside the company. Niccol’s career also includes a stint as CEO of Taco Bell.

The sudden change in management comes as the coffee chain grapples with weak results in the United States and China, and amid pushback from activist investors who are looking for a shake-up to address slowing sales. The company has also faced mounting pressure from union officials and activists who argue it illegally retaliated against workers and resisted contract negotiations, in the midst of a nationwide union campaign.

Narasimhan will step down as CEO and board director immediately, with chief financial officer Rachel Ruggeri stepping in as interim CEO until September 9. The company’s current board chair, Mellody Hobson, will hand that role over to Niccol.

“I am energised by the tremendous potential to drive growth and further enhance the Starbucks experience for our customers and partners,” Niccol said in a statement.

Shares of Starbucks rose more than 14 per cent in premarket trading. Chipotle’s stock fell 8 per cent.

Workers United, part of the Service Employees International Union, represents workers at more than 400 of Starbucks’ roughly 10,000 company-owned stores in the US.

Under former CEO and founder Howard Schultz — who characterised union organisers as outside forces and urged employees not to be “distracted” by them — the company largely resisted engaging with the union. By contrast, Narasimhan appeared to take a more pragmatic approach. The company began bargaining a framework for a labour contract with union stores earlier this year and has said that it hopes to wrap up the bargaining process with individual stores by the end of the year.

Schultz said in a statement that Niccol is “the leader Starbucks needs at a pivotal moment in its history”.

New York Times News Service