Shares in Chipotle Mexican Grill Inc (NYSE:CMG) caught fire overnight on Tuesday after the burrito chain revealed it was bringing in Taco Bell boss Brian Niccol as its new chief executive.
Niccol joined Taco Bell in 2011, taking the helm four years later. He helped to reposition the business as a lifestyle brand and launched the chain’s breakfast offerings.
READ: Chipotle shares up after founder and CEO steps down to become executive chairman
Digital innovation will also likely be key for the 43-year-old as he looks to bring back diners who have deserted Chipotle in recent years amid a series of foodborne illness outbreaks.
Niccol was responsible for introducing mobile ordering and payment across Taco Bell’s 7,000 locations across the US.
'World-class executive'
“Brian is a proven world-class executive, who will bring fresh energy and leadership to drive excellence across every aspect of our business,” said current chief executive and founder Steve Ells.
“His expertise in digital technologies, restaurant operations and branding make him a perfect fit for Chipotle as we seek to enhance our customer experience, drive sales growth and make our brand more relevant.”
Prior to his time at Taco Bell, Niccol held leadership positions at Pizza Hut - another Yum! Brands Inc (NYSE:YUM) company.
In a statement, Niccol said he wanted Chipotle to provide a "consistently great" customer experience.
"I will also focus on dialing up Chipotle's cultural relevance through innovation in menu and digital communications," he said. "This will attract customers, return the brand to growth, deliver value for shareholders and create opportunities for employees."
It won’t be an easy task for Niccol, though. Chipotle is seeing traffic through its stores slowly decline after fresh reports of a norovirus outbreak at its restaurant in Sterling, Virgin last July, once again damaged the firm’s reputation.
Only last week, Chipotle was hit with a slew of downgrades from Wall Street analysts who felt its latest earnings were more evidence that the chain is struggling to bring back diners.
Menu price hikes helped to paper over some cracks, but the company said it expects traffic to continue its decline until at least the middle of the year.
‘Best possible outcome’
“Naming Taco Bell's chief Brian Niccol as its new CEO was the best possible outcome for CMG's search, in our view, given his track record of innovation, expertise in marketing, menu development, operations, and digital,” said Morgan Stanley analyst John Glass.
“This is not to minimize the work ahead at CMG, but at least now it can begin.”
In premarket trade on Wednesday, Chipotle’s stock was up 11.9% to US$281.11.