A five-day strike called by Starbucks’ (SBUX) baristas is likely to expand to over 300 U.S. stores today, according to Starbucks Workers United, as cited by Reuters. Furthermore, the union claimed that around 5,000 workers are expected to join the strike before it ends on Christmas Eve.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
The strike began on Friday in key cities, including Los Angeles, Chicago, and Seattle, and quickly spread to Boston, Dallas, Portland, and beyond. By the weekend, workers in New York, Denver, and Pittsburgh had joined the protest, calling for better labor agreements.
Why Are SBUX Baristas on Strike?
SBUX workers are protesting stalled contract negotiations with the coffeehouse chain. The union, Starbucks Workers United, began unionizing in 2021 and claims that Starbucks has failed to honor a pledge made earlier this year to finalize a labor agreement by the end of this year. Additionally, workers are demanding the resolution of hundreds of unfair labor practice charges filed by SBUX workers with the National Labor Relations Board.
Negotiations between the company and the workers’ union have stalled over economic terms. Starbucks has proposed annual pay increases of 1.5% or more for unionized workers, ensuring they always receive at least 1.5% even if non-unionized employees receive less. Furthermore, the company has stated that its baristas earn an average hourly wage of $18, with benefits like health care, free tuition, and paid family leave pushing total compensation to an average of $30 per hour for those working 20+ hours per week.
Yet, workers have insisted that they deserve more, fueling a labor movement that continues to expand across the nation.
Has SBUX Been Affected by the Strike?
The timing of the strike coincides with one of Starbucks’ busiest seasons. However, the company reported “no significant impact” on operations. In a statement, Starbucks said, “We respect our partners’ right to engage in lawful strike activity, and we appreciate the thousands of partners across the country who are continuing to support each other and deliver the Starbucks experience for our customers.”
Is Starbucks a Buy or Sell?
Analysts remain cautiously optimistic about SBUX stock, with a Moderate Buy consensus rating based on 14 Buys, six Holds, and four Sells. Year-to-date, SBUX has declined by more than 5%, and the average SBUX price target of $103.52 implies an upside potential of 18.4% from current levels.
