Green Apron Service is one of the biggest new tenets in corporation philosophy at coffee giant Starbucks (SBUX). But the plan is starting to fall apart on contact with reality. We have heard from the baristas themselves, who are having a hard time fitting all these new requirements in, seemingly without much in the way of new help despite Starbucks’ protestations and calls for huge new hiring plans. But even customers are starting to weigh in, and they are not happy. Investors are, however, as evidenced by shares up nearly 1.5% in Tuesday afternoon’s trading.
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The New York Post recently offered up a look on this front, saying that Starbucks “…needs proper managers.” It immediately followed up that assertion with an explanation: “No one needs to wait 11 minutes for a drink with a cute message scribbled on the side.” This may prove a problem for Starbucks going forward: drink messages were at least a component of the Green Apron Service plan.
The report got worse for at least one Starbucks, detailing foul conditions including a locked restroom that was packed with “…mounds of malodorous garbage.” Trash bins and floors in terrible shape as well only underscored a Starbucks experience that was not so much welcoming as it was repellent. The wait to get a “no-frills cappuccino” was described as “half a lifetime.” Clear hyperbole, but part of the problem. A warm, welcoming experience requires frequently-cleaned facilities and short waits. That means a lot more people need to be involved.
“Starbucks is On the Ropes”
Meanwhile, the union has noticed Starbucks’ struggles of late and is, apparently, considering the opportunity to start a strike. Despite Brian Niccol’s insistence that hiring is going on, reports note that stores remain “understaffed,” and baristas’ jobs are only getting more complex, which does not add up to a warm and welcoming experience. Just how much impact a strike will have given how many baristas are non-union, however, is unclear.
While Starbucks has recently reached out to us personally to point out that Starbucks offers excellent pay and benefits, other reports point out something different. A report from In These Times notes that Starbucks partners are “…on SNAP and Medicaid” with many more unable to “…afford everyday necessities like rent, groceries, and healthcare costs.” With hundreds of unfair labor practice charges also said to be unresolved behind the scenes, there is a clear issue present for Starbucks to address before Green Apron becomes much more than a philosophy.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 14 Buys, six Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 14.27% loss in its share price over the past year, the average SBUX price target of $102.10 per share implies 21.84% upside potential.
