Shares in coffee giant Starbucks (SBUX) cooled down today as workers throughout the U.S. got set to throw down their aprons and go out on strike.
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Iconic Home
Unionized Starbucks baristas are primed to strike in at least 40 cities including New York City, Dallas, Philadelphia and its iconic Seattle home to secure better working conditions.
In total, over 1,000 staff at 65 cafes will participate in the action as part of the Workers United union’s plan to bring attention to Starbucks’ refusal to negotiate employment contracts. It is also calling on customers to give up their favorite brews for the day as part of a “no contract, no coffee” campaign.
The union wants the management to introduce new proposals to improve staffing and pay, and resolve hundreds of unfair labor practice charges it’s filed against the company.
“We have not been given meaningful proposals to finalize this contract since the announcement of the strike authorization vote,” Jasmine Leli, a Starbucks barista for three years and strike captain from Buffalo, New York, told the Guardian. “The baristas are prepared to do whatever it takes to get this finalized contract.”
Red Faces
The union has chosen to take action today as it is the company’s annual “red cup day” which is a promotion hailing the start of the holiday season.
Starbucks said it was “disappointed” that Workers United had voted to strike, rather than continue bargaining, but insisted the “vast majority” of stores would be unaffected by the action.
A spokesperson for Starbucks, Jaci Anderson, said: “We are disappointed that Workers United, who only represents around 4% of our partners, has voted to authorize a strike instead of returning to the bargaining table. When they’re ready to come back, we’re ready to talk.”
Starbucks CEO Brian Niccol, who took on the top job in 2024, has sought to overhaul U.S. store operations in a bid to win back customers. However, some of those including cost-cuts and uniform changes have proved unpopular.
Starbucks sales, earnings and its share price have also looked shabbier in recent months as a result of more intense competition, consumers looking for cheaper options in a time of economic uncertainty and uninspiring food options.
However, hope is brewing with Starbucks reporting a 5% increase in global revenue in Q4 and a 1% rise in global comparable store sales, marking the first positive quarter in seven quarters.
Is SBUX a Good Stock to Buy Now?
On TipRanks, SBUX has a Moderate Buy consensus based on 12 Buy, 7 Hold and 2 Sell ratings. Its highest price target is $115. SBUX stock’s consensus price target is $95, implying an 8.87% upside.
