Starbucks CEO’s honeymoon is over, as strikes expand to 12 states
The Starbucks workers’ five-day strike that began Friday in LA, Chicago, and Seattle has expanded to stores in 12 states. At least 30 stores nationwide were closed as of Sunday — not a great thing for a company whose sales have been struggling.
The union, Starbucks Workers United, has said that its walkout could expand to hundreds of locations by Christmas Eve, with 535 US Starbucks cafes now unionized. It’s not ideal timing for the chain, which typically sees its highest sales over the holiday season.
Starbucks shares are down 15% this month, including a 1% decline today, while the broader market is treading water. The company reported a 6% drop in same-store North American sales in its most recent quarter. Analysts have also recently bailed on the stock because of uncertainty about the company’s turnaround.
The stock got a 24% bump overnight when it hired new CEO, Brian Niccol, who came over after a successful run at Chipotle. But after its recent declines, the Niccol bump now stands at 13%.
Niccol has proposed a slew of changes to win back customers, including bringing back handwritten names on cups, the condiment bar, and freezing menu prices for the rest of the fiscal year.
According to the union, negotiations — which began in April — fell apart after the coffee giant proposed a contract without wage increases for unionized staff.
Starbucks shares are down 15% this month, including a 1% decline today, while the broader market is treading water. The company reported a 6% drop in same-store North American sales in its most recent quarter. Analysts have also recently bailed on the stock because of uncertainty about the company’s turnaround.
The stock got a 24% bump overnight when it hired new CEO, Brian Niccol, who came over after a successful run at Chipotle. But after its recent declines, the Niccol bump now stands at 13%.
Niccol has proposed a slew of changes to win back customers, including bringing back handwritten names on cups, the condiment bar, and freezing menu prices for the rest of the fiscal year.
According to the union, negotiations — which began in April — fell apart after the coffee giant proposed a contract without wage increases for unionized staff.
