Nation's Restaurant News On the Go #86
Nation's Restaurant News
The #1 source of news and business intelligence for restaurant and foodservice industry professionals
Managing editor Leigh Anne Zinsmeister here.
The CEOs of the restaurant industry seem to be playing a bit of musical chairs these days. As of Wednesday afternoon, in the month of August, Todd Penegor joined Papa Johns after “retiring” from Wendy’s back in February; Brian Niccol jumped from Chipotle to Starbucks, with Scott Boatwright stepping up to the plate at the fast-casual Mexican chain; Bloomin’ Brands appointed Mike Spanos to succeed David Deno; Damola Adamolekun was tasked with guiding Red Lobster out of bankruptcy; Chris Teppen joined Checkers and Rally’s; PJW Restaurant Group promoted Jessica Breslow; and — this just in as I type — Jacqueline Hawthorne-Robinson was appointed at Golden Krust, which also has a new CFO.
Phew.
So what’s going on here? The industry is certainly struggling, as we saw in last quarter’s earnings reports, and in the many bankruptcy filings of 2024 (again, so far). But many, if not most, of the new appointments seem to be the result of circumstance. Papa Johns needed a new leader because its previous one left for Shake Shack in March (remember when it was hard to imagine buzzier news?) The previous CEOs at Bloomin’ and Checkers had announced their intent to retire. And Chipotle, of course, was left in the dust by Niccol’s departure.
But Starbucks in particular does seem shaken by the economic environment. The coffee giant, pulling in a big name to replace the chief executive it hired just 16 months before, “only” had two quarters of negative sales before making such a drastic move.
Personally, I’m inclined to chalk the news onslaught to end-of-summer moves as restaurants get a team in place for the fall and busy holiday season. There were actually just as many CEO changes (eight exactly!) in the restaurant industry last August. But does the volatility in the industry as a whole this year, and the high-profile nature of this year’s changes, portend more major executive moves through the end of the year? Only time will tell.
Why Todd Penegor came out of retirement to lead Papa Johns
Todd Penegor stepped down as the chief executive officer of Wendy’s in early February after spending eight years in the role – an unusually long tenure in the dizzyingly fast quick-service space. Factor in the COVID-19 pandemic, and it undoubtedly felt even longer.
Penegor’s plan from there was simple – retirement peppered with a few board of directors’ roles. In June, he joined the Dutch Bros board, adding to his already existing role on the Ball Corporation board. His plan was going smoothly.
But it was short lived. On Thursday, Penegor was officially announced as the CEO of Papa Johns, a business that includes more than 5,000 locations in 45 countries and territories around the world.
Brian Niccol’s résumé illustrates why he was chosen to lead Starbucks’ turnaround
When Brian Niccol was announced as Starbucks’ new chief executive officer Tuesday morning, replacing Laxman Narasimhan after a stunningly short stretch, the coffee giant’s stock skyrocketed more than 20%, putting the chain on track for its largest single-day percentage increase since going public in 1992.
Meanwhile, shares at Chipotle, where he has served as CEO since 2018, tumbled nearly 13% on the news.
To get a clear understanding of Niccol’s impact, this divergence pretty much sums it up. Indeed, few leaders are as tenured and effective in this industry as Niccol has been.
He joined the industry from Procter & Gamble in 2005, when he was named vice president at Yum Brands. In 2007, he was named chief marketing officer at Yum’s Pizza Hut brand and moved over to sister chain Taco Bell in 2011 to serve as chief marketing and innovation officer. He then served as president from 2013 to early 2015, spearheading the chain’s successful breakfast launch, introducing mobile ordering and payment, and solidifying its presence on social media .
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Damola Adamolekun named future CEO of Red Lobster
Damola Adamolekun will be Red Lobster’s chief executive officer if its sale to an affiliate of Fortress Capital goes through, Fortress said Monday.
The appointment and sale both still require court approval as the company is undergoing reorganization following its filing for Chapter 11 bankruptcy protection in May.
Adamolekun most recently was CEO of P.F. Chang’s, a position he held until December of 2023, and he has since been an operating partner of Garnett Station Partners , whose portfolio includes Pollo Tropical, Primanti Bros, Twin Peaks, Checkers, and Carrols Restaurant Group.
Prior to being P.F. Chang’s CEO, he was its chief strategy officer as well as a partner in P.F. Chang’s principal owner, Paulson & Co., an investment firm based in New York City. Before that he worked for the investment banking division of Goldman Sachs and as a private equity associate at TPG Capital. He has also served on the board of P.F. Chang’s, Inday, the National Restaurant Association, and International Tower Hill Mines.
Q2 illustrates a tough new normal for restaurants, with no end in sight
Anyone else remember the throes of the Great Recession, when restaurant success was redefined to become “flat is the new up ?” This reference seems especially relevant now on the tail end of second quarter earnings reports. One of the big takeaways from those reports so far is that they look an awful lot like that “flat is the new up” era.
Use of the word “awful” here is intentional, by the way.
Q2 is supposed to be the industry’s surefire period, bolstered by special occasions like Mother’s Day and graduations, while simultaneously distant enough from the holiday-induced budget drain that tends to dampen Q1. That has not been the case this year.
Maze vs. Oches: The editors in chief at RB and NRN debate Starbucks’ Brian Niccol hire
Starbucks hired Chipotle CEO Brian Niccol to be its next chief executive, but could it be all bark and no bite? Restaurant Business editor in chief Jonathan Maze and Nation’s Restaurant News editor in chief Sam Oches go toe to toe on the seismic move and whether it makes any sense for Starbucks.
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