A Year After Brian Niccol's Move, Starbucks and Chipotle Both Sink
Both Chipotle and Starbucks are dealing with inflation and tariffs as consumers continue to struggle.
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A year has passed since Brian Niccol switched teams, from Chipotle CMG to Starbucks SBUX.
First a little background. After a seven-year stint as chief marketing officer at Taco Bell YUM, Brian Niccol became the CEO of Chipotle Mexican Grill in 2018.
He held that title through August of 2024. During Niccol’s tenure, Chipotle’s stock gained over 700%, as revenues and profits soared.
He then took the reins at Starbucks in September of last year. At the time, the move was considered a coup for the Seattle-based coffee retailer.
Performance and Chart Comparison
Let’s compare the performance of both names since Niccol moved from Chipotle to Starbucks one year ago. Then we’ll chart both stocks to determine their future prospects.
Losing Niccol may have impacted Chipotle, as the stock has fallen by 31% over the past 12 months. But Niccol’s new employer has also underperformed the broader market, with Starbucks shares declining by 12% over that span.
Chipotle’s chart looks terrible. The stock has broken down from a large triple-top pattern (shaded yellow) that formed over an 18-month period. Chipotle is trading well below its 50-day (blue) and 200-day (red) moving averages, which are both declining. The stock recently reached its lowest price since late 2023.
Starbucks shares have also formed a triple top pattern (shaded yellow). This pattern formed over a five-year period, and is so large I used a monthly chart to help readers visualize the formation.
Chipotle and Starbucks Deal With Inflation
Many consumers are cost-conscious. McDonald’s MCD CEO Chris Kempczinski recently acknowledged that the burger giant’s prices needed to come down to attract customers to the golden arches. To do so, McDonald’s recently announced plans to bring back extra value meals and a $5 breakfast special.
Meanwhile, Chipotle and Starbucks are dealing with issues related to tariffs and inflation.
For the most part, Starbucks’ clientele is less concerned about price, and more focused on the experience -- the tastes, smells, and sounds of a Starbucks. History shows consumers are willing to pay up for that experience.
Tariffs are a bigger problem for Starbucks. Brazilian coffee imports are subject to a 50% tariff, and Brazil is the largest coffee exporter to the U.S.
Chipotle has battled to keep up with the rising cost of ingredients like beef and avocados. Like Starbucks, Chipotle is a premium experience, as customers are willing to pay more for fresh, often locally-sourced ingredients.
Bottom Line
Ultimately, we defer to the chart. While I might enjoy the occasional burrito bowl from Chipotle, or even a rare Cafe Americano from Starbucks, I won’t be buying shares of either company for a while.
(Note: Starbucks has not raised menu prices, as incorrectly stated in an earlier version of this article).
At the time of publication, Ponsi had no position in any security mentioned.
