Coffee giant Starbucks (SBUX) has been having some trouble lately getting its workers on the same page. Whether it is ramping up expectations on baristas to create warm, welcoming environments while still serving coffee at high speeds or just getting corporate staffers to move across the country, Starbucks’ labor troubles know few bounds. It turns out the resistance to moving to Nashville is growing, and shareholders are displeased, sending shares down over 1.5% in Tuesday afternoon’s trading.
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Starbucks is pretty eager to make this move happen, reports note, to the point where it is even offering stock grants and travel reimbursements to those who have not yet made the decision to move. But beyond that, reports note that this is an either-or situation: either you work with Starbucks in Nashville, or you do not work for Starbucks.
Starbucks employees have multiple concerns. Seattle denizens tend to be liberal, noted one report, while Nashville is very much in a red state. The stock grants also reportedly came with pay cuts “…of at least 5%,” reports noted. But even this was framed in an upbeat fashion, as Nashville has a lower cost of living than Seattle does.
Yeah, But Why, Though?
Meanwhile, reactions are emerging about Starbucks’ recent cross-promotional move with The Devil Wears Prada 2, suggesting that this is not only the wrong place, but also the wrong time. As one report described, this is a cross-promotion going on about “….a theatrically released movie about glossy magazines, released at a time when there are minimal audiences for either….” This ultimately led to a “…no foam, extra shot, venti facepalm,” noted The Guardian.
Thus, some believe this is an attempt to revive nostalgia, which is actually in keeping with Starbucks’ “third-place” plans to build a place for people to go besides work or home. Yet the idea that people will want to sample the high-end coffee favorites of movie characters who work in industries that are currently dying is puzzling to say the least.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 14 Buys, 12 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 21.04% rally in its share price over the past year, the average SBUX price target of $102.13 per share implies 4.9% upside potential.