Starbucks denies Chipotle takeover rumours as turnaround continues

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Starbucks is putting the brakes on takeover talk, flatly denying it plans to buy Chipotle Mexican Grill after a report suggested the coffee giant had been working on a bid.

“As a matter of policy, we don’t comment on rumours and speculation, but we want to be clear we are not buying Chipotle,” Starbucks told Reuters on Monday.

The denial follows an Oct. 8 report by the Financial Times that Starbucks had worked on a takeover proposal. Chipotle shares jumped more than 7% after the news broke, but fell 3.1% in Monday morning trading in New York. Starbucks shares were little changed, according to Bloomberg.

Takeover deal would have generated $50B in annual sales

A deal would have created a restaurant powerhouse with about $50 billion in annual sales, Reuters reported. But analysts questioned whether the two very different businesses would make a good fit.

For now, Starbucks says its priority is fixing its own business.

The company is sticking with its “Back to Starbucks” strategy, which CEO Brian Niccol launched to revive sales after a prolonged slump, Bloomberg reported.

Niccol knows Chipotle well. He led the burrito chain from 2018 to 2024, overseeing a turnaround that made it one of the restaurant industry’s top performers for several years, PEOPLE reported.

Starbucks focused on bringing customers back

At Starbucks, he’s trying to bring customers back by focusing on quality coffee, menu innovation and better service in a welcoming environment, according to the company’s website.

That has meant bringing back familiar perks, including free refills for customers drinking in-store and condiment bars, along with a simplified menu and an updated code of conduct.

Starbucks is also closing hundreds of underperforming North American locations as part of its broader turnaround. The chain has more than 18,000 locations in the region, with the closures representing roughly 1% of its stores, Reuters reported.

The restructuring plan involving 250 underperforming stores in Canada and the U.S. has already led to abrupt Starbucks closures across Ontario.

Meanwhile, Chipotle has shown signs of improvement since Niccol left in 2024. After several quarters of declining sales, the chain has benefitted from more frequent product launches and updates to its loyalty program, per Bloomberg.

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