There is anger aimed at coffee giant Starbucks (SBUX) today as its plans to open a “selective community store” in North Philadelphia were shut down. This was not the first time, reports noted, but investors seemed oddly happy about it all the same. In fact, Starbucks shares were up over 2% in Tuesday afternoon’s trading.
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Starbucks was planning to open a “selective community store” in North Philadelphia, an area some consider to be an “underserved neighborhood.” But Starbucks got a look at the price tag to put up such a location, reports noted, and balked. The store was originally supposed to open last year, but construction costs did not improve in the interim.
A “community store,” noted reports, is “…designed to reflect the culture and character of the neighborhood…” it operates in, and also focuses on “…hiring diverse construction contractors for such stores.” Back in 2022, Starbucks originally planned to open 1,000 community stores worldwide before 2030. However, those goalposts seem to have been moved. While Starbucks is increasingly focused on the “third place” notion, it also closed a community store in Trenton, New Jersey. This likely leaves some wondering just how badly Starbucks wants to get people into the cafes after all.
“Dear Partners” Letter Goes Too Far, Says Judge
Starbucks has also seen little relief on the labor front. A National Labor Relations Board (NLRB) judge recently found against Starbucks for a “Dear Partners” letter it sent to three stores in 2022. The stores in question were starting to unionize, and Starbucks fired off a letter that noted that wages and benefits would be, effectively, “frozen” during negotiations.
NLRB Administrative Law Judge Eleanor Laws declared that it was reasonable enough for employees to consider that a threat, which was unlawful when the letter was written. Thus, the letter was not simply an exchange of viewpoint, but rather a coercive action, essentially suggesting there would be consequences for unionization.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 14 Buys, nine Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 4.34% loss in its share price over the past year, the average SBUX price target of $100.61 per share implies 7.63% upside potential.
