The coffee chain Starbucks (SBUX) baristas’ union, Workers United, threatened to stage a strike at the 11th hour yesterday. The union told Starbucks that 98% of its members had voted in favor of a strike, if need arises. This drama unfolded last night when Starbucks and the workers union were set to hold their final negotiations for the year. SBUX stock slipped toward the end of yesterday’s trading session, closing down 1.1%.
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Starbucks and Workers Union Tiff Intensifies
Starbucks and the union have been at loggerheads since the latter’s inception in December 2021. The union represents employees from over 500 of Starbucks’ 10,000 stores. The union members have alleged that Starbucks engages in unfair labor practices and have been demanding more compensation and benefits.
Earlier this year, both parties agreed to resume negotiations on finalizing a new foundational contract. A Starbucks spokesperson said that since April, both parties have negotiated on dozens of tentative agreements, including issues that baristas have raised. The company expressed disappointment over the strike threat, emphasizing that constructive negotiations were already underway. Union representatives were scheduled to meet with Starbucks yesterday for the final negotiation of 2024. Despite the tension, Starbucks remains determined to reach a final framework agreement.
As part of the ongoing labor contract negotiations, Starbucks CEO Brian Niccol announced on Monday that it would more than double parental leave for eligible U.S. baristas. Employees averaging over 20 hours of work per week will be able to access the enhanced parental leave benefits.
Is SBUX Stock Worth Buying?
Wall Street remains divided on Starbucks’ stock trajectory. On TipRanks, SBUX stock has a Moderate Buy consensus rating based on 14 Buys, six Holds, and four Sell ratings. Also, the average Starbucks price target of $103.52 implies 12.41% upside potential from current levels. Year-to-date, SBUX shares have lost 1.6%.
