New consumer CEOs start life in the slow lane

Hot seat. bosses of large consumer groups have good reason to watch ir backs. Nestlé, Starbucks, Davide Campari Milano and now Nike have all ditched ir CEOs in recent months amid poor performance. mittedly, re is plenty new bosses can do to unpick past mistakes. But it’s probably no accident that all four switches happened amid weaker consumer spending. It suggests quick fixes may be out of reach.
Nike last Thursday said that former executive Elliott Hill would return to replace CEO John Donahoe, whose term as chief of $130 billion sportswear giant started in 2020. That followed $250 billion Nestlé’s sudden replacement of CEO Mark Schneider with insider Laurent Freixe, announced late last month, and Starbucks’ mid-August decision to bring Chipotle he Brian Niccol in for Laxman Narasimhan after less than two years. award for quickest switcheroo, however, goes to $10 billion Aperol and Courvoisier maker Campari, which announced on Wednesday that CEO Matteo Fantacchiotti would leave for “personal reasons” after just five months.

changes surprised investors. Starbucks move initially ded $20 billion to coffee chain’s value, while Nike’s shares closed up 7% on Friday. It’s also part of a wider trend towards shorter CEO tenures. average term of an S&P 500 boss has declined from a peak of over 11 years to less than nine years last year, according to data from executive recruitment firm Spencer Stuart.

re’s plenty for new guard to get ir teeth stuck into. Nestlé, for example, has probably underinvested in vertising for years. At Starbucks, Niccol could improve company’s digital-marketing strategy and quality of food and drink. Outgoing Nike CEO Donahoe, meanwhile, arguably pushed too aggressively into direct-to-consumer selling while neglecting retail channels, which new boss Hill could potentially try to revive.

On or hand, it’s unlikely to be a coincidence that four large consumer-facing brands have suffered from slowing sales growth simultaneously. A weaker global economy is also to blame. Campari, for starters, is struggling because of weak Chinese demand. In first six months of year, its Asia Pacific sales fell by 12% year-on-year. Fantacchiotti left after he suggested that wider drinks market was still on soft side. Starbucks and Nike’s problems, however, are closer to home. Inflation is making shoppers more cost conscious, which is leing to disappointing sales. Nestlé, which sells Nescafé and KitKats, is also exposed to a weaker U.S. consumer.

upshot is that any shareholders hoping for a quick recovery in sales may be disappointed. Economic slowdowns have a habit of revealing strategic problems lurking underneath a company’s surface. But y’re also a tough time to launch a turnaround.