When it comes to the striking employees at coffee giant Starbucks (SBUX), we have heard from both sides in fairly equal measure. Starbucks has actually reached out to us before declaring they offer “…a great place to work,” and have noted it offers “the best job in retail.” Word from one striker, though, disputes that. Investors seem to be getting tired of the whole thing, as evidenced by the fractional drop in Starbucks share price in Thursday afternoon’s trading.
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The Starbucks barista in question, who reports suggest is Diego Franco, who contributed an opinion piece to USA Today, detailed how Starbucks does not really offer “the best job in retail.” However, the piece goes on to make clear that it could, with some key changes.
The piece also illustrates the environment in which Starbucks baristas work. From the piece: “Stores that should have six baristas behind the counter now run on three. We’re told to move faster, smile more, and somehow absorb the strain of constant understaffing and shifting policies.” We have seen much of this happen already; Starbucks’ Back to Starbucks plan, its plan to pursue the “third-place” dynamic, depends heavily on its front line, its baristas. But while Starbucks has talked about increasing staffing, many reports suggest that the plan has not yet materialized.
And A Boycott Besides?
The strike is not likely to do much damage to Starbucks by itself. Even striking on Red Cup Day, one of Starbucks’ busiest days, is not likely to deliver much of a blow. After all, striking Starbucks locations number about 65 so far. Starbucks reps note that Workers United only represents about 4% of the workforce.
But reports note that Workers United is trying to amplify its strike by calling on customers to stage a boycott until a contract is achieved. There is little to suggest that this boycott is taking place, but if Workers United can get customers to join in, then Starbucks may be forced to deal more aggressively. Workers United’s biggest weakness is its lack of impact. If it can close stores and keep customers away from the many, many still-open locations, then it adds to its strength.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 12 Buys, seven Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 12.06% loss in its share price over the past year, the average SBUX price target of $95 per share implies 9.79% upside potential.
