Workers United, the union representing over 10,000 Starbucks Corp. (NASDAQ:SBUX) baristas announced a strike in Los Angeles, Chicago, and Seattle. This action, set to begin Friday morning, comes as the coffee giant faces unresolved issues with its workforce during the busy holiday season.
What Happened: Workers United, which represents employees at 525 Starbucks locations nationwide, stated on Thursday that the walkouts could intensify daily. If no agreement is reached, the strike might expand to hundreds of stores by Dec. 24, potentially affecting holiday sales, Reuters reported on Friday.
Starbucks has expressed willingness to continue negotiations, although it claims union representatives ended the recent bargaining session prematurely. The company and the union had established a framework in February to facilitate organizing and collective bargaining, with negotiations starting in April.
Starbucks reported holding over nine bargaining sessions with Workers United since April, reaching agreements on more than 30 topics, including economic issues. However, the union criticized Starbucks for not presenting a serious economic proposal despite public commitments to finalize contracts by year-end.
The coffee giant is undergoing a transformation under its new CEO, Brian Niccol, aiming to revitalize its coffee house culture by enhancing cafes, reducing wait times, and simplifying the menu.
Why It Matters: The strike comes at a critical time for Starbucks as it navigates a strategic shift under Niccol. The company is scaling back on promotions to focus on premium coffee, a move that aligns with its efforts to improve in-store experiences and reinforce its premium image.
Additionally, Starbucks is exploring options for its Chinese operations amid fierce competition and declining sales, including a potential stake sale. These strategic decisions highlight the company's focus on maintaining its market position while addressing internal challenges.
Price Action: Starbucks stock fell 1.27% to close at $88.76 on Thursday, as per Benzinga Pro. Year-to-date, the stock is down 5.2%.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
