Frequent executive changes this year reflect the turmoil many restaurants and fast food chains are facing.

The US restaurant industry is experiencing a turbulent year. Just look at its executives: by 2024, one-third of listed catering companies have hired new CEOs, not to mention changes in many private companies.

It all started with$The Wendy's Co (WEN.US)$, it appointed Kirk Tanner (Kirk Tanner), a former PEP.O (PEP.O) executive, as the new CEO in January to succeed Todd Penegor (Todd Penegor), followed by Al Poyo Loco (Todd Penegor) (Todd Penegor)$El Pollo Loco (LOCO.US)$ Holdings) hired Liz Williams (Liz Williams) in February.

March,$Shake Shack (SHAK.US)$Rob Lynch (Rob Lynch) was dug up from Papa John's International, when Randy Garutti (Randy Garutti) was about to retire. Five months later,$Papa John's (PZZA.US)$Penego was also introduced.

Things accelerated in August:$Starbucks (SBUX.US)$Laxman Narasimhan (Laxman Narasimhan) was fired, and$Chipotle Mexican Grill (CMG.US)$Brian Niccol (Brian Niccol) was hired.$Bloomin Brands (BLMN.US)$Then before use$Delta Air Lines (DAL.US)$Chief Operating Officer Michael Spanos (Michael Spanos) replaced Dave Deno (Dave Deno), who is about to retire. Furthermore,$BJ's Restaurants (BJRI.US)$CEO Gregory Levin (Gregory Levin) resigned at the end of last month.

ex$Darden Restaurants (DRI.US)$Chief Financial Officer Bradford Richmond (Bradford Richmond) is currently the interim CEO of BJ's Catering, while Scott Boatwright (Scott Boatwright), the chief operating officer of Chipotle Mexican Grill, is the temporary head of the burrito chain. Both companies are still searching for successors.

There have been more CEO changes this year than the past three years combined. “This is the most CEO change I've seen since I started watching the restaurant industry in 2019,” said Lauren Silberman (Lauren Silberman), an analyst at Deutsche Bank. “It's a bit like a game to grab a chair.”

While some replacements were planned retirements, others were due to poor performance. Frequent executive changes reflect the uncertainty many restaurants and fast food chains have faced this year.

Consumers are eating out less often under the pressure of high inflation. Meanwhile, since the pandemic, customers have increasingly turned to digital orders, takeout purchases, and healthier diets.

Many companies are struggling to adjust and find new directions in this challenging environment. This meant falling sales, plummeting stock prices, and increased pressure from the board of directors, shareholders, and in some cases, aggressive investors.

“As a result, many restaurants lost focus on basic principles and unexpectedly compromised the customer experience,” said Andrew Hayes (Andrew Hayes), head of the global consumer goods business at leading consulting firm Russell Reynolds (Russell Reynolds).

Silberman pointed out that all of this may lead to a desire for senior changes to seek new perspectives. That's why most new CEOs this year were hired externally rather than promoted internally, and in some cases, even from outside the restaurant industry.

CEO changes often make stock prices more volatile in the short term, as investors evaluate the new chief's performance. Sometimes, if confidence in new management is high, stock prices will be boosted.

The stock market's performance after the recent CEO change was mixed.

Starbucks shares have risen 25% since Nicole was appointed, thanks to his outstanding performance at Chipotle Mexican Grill. Just one month after Penego joined BJ's Catering, its share price has already risen 13%.

But that wasn't always the case. Wendy Burger's stock price continued to fall during Tanner's tenure — down 9% since he was appointed CEO, and investors questioned the burger chain's relationship with$McDonald's (MCD.US)$Whether it can stand out in the price war with Burger King.

Bloomin Brands' stock price has also fallen 6% since Spanos took office. Investors may need to see more evidence that the former aviation executive was able to transfer his knowledge and experience to the restaurant industry.

Over the next six to twelve months, many new CEOs will face close scrutiny to assess whether they can get their businesses back on track.

Hayes said the key to success is a return to basic principles: “To drive store traffic, revenue growth, and improve the unit economy, restaurants need to be faithful to their core brand values and commitments to optimize in-store operations and customer service.”

Edit/Rocky