Over 1,000 Starbucks employees, represented by a union, are set to strike at 65 locations across the U.S. on Thursday. This action is a response to stalled labor negotiations with the company.
The timing of the strike is significant, as it coincides with Starbucks’ Red Cup Day, which is usually one of their peak selling days.
Since 2018, customers have received free reusable cups with their holiday drink purchases on this day.
Starbucks Workers United, the union for baristas, indicated that stores in 45 different cities will be impacted by the strike. Major cities like New York, Philadelphia, and Seattle are among those affected.
No conclusion date for the strike has been established yet, and organizers have mentioned that more locations may join if negotiations don’t progress.
Despite the strike, Starbucks insists that most of its U.S. stores will be fully operational.
The coffee giant operates around 10,000 company-run stores and another 7,000 licensed outlets, including those in grocery stores and airports.
Currently, about 550 Starbucks locations in the U.S. have unionized staff.
Even with an increasing number of workers seeking union representation, Starbucks closed 59 unionized stores in September as part of a broader corporate restructuring.
So, what’s prompting the strike?
Stalled Contract Agreement
Workers assert that they’re striking because Starbucks has yet to finalize a contract with the union.
Unionization began at a Buffalo store in 2021, and by December 2023, Starbucks expressed its commitment to finalize an agreement by the end of 2024.
However, after CEO Laxman Narasimhan was ousted in August 2022—who was the one to make that promise—the union claims that talks have stalled under the current leadership of Brian Nicol.
Demands for Better Conditions
Employees are advocating for shorter hours and improved staffing, especially in locations where long customer waits have become the norm. Many find it challenging to meet the 20-hour work week necessary for benefits.
Additionally, they are calling for increased pay, noting that company executives earn substantial salaries.
The union has also highlighted issues with numerous unfair labor practice complaints. Workers allege retaliatory firings against baristas who supported union efforts and grievances related to policy enforcement, such as limiting restroom access to paying customers.
Starbucks’ Perspective on Compensation
Starbucks claims to offer some of the highest wages and benefits within the retail sector, with an average hourly wage of $30. Benefits include generous paid family leave and full tuition reimbursement.
Sara Kelly, Starbucks’ chief partner officer, mentioned in a recent letter that negotiations had stalled this past spring when the union withdrew from talks.
She also asserted that the company is open to resuming discussions and believes a fair agreement can be reached quickly. According to her, most employees report satisfaction with their work environment, and barista turnover is below the industry average.
Previous Strikes and Future Implications
This isn’t the first instance of workers striking at Starbucks. In recent years, there have been actions taken on Red Cup Day, including a notable five-day strike before Christmas in 2022 that closed numerous stores.
In each of these cases, Starbucks reported only minor disruptions to their overall operation.
The current strike is open-ended and may expand to include additional unionized stores.
Although nonunionized stores greatly outnumber those that are unionized, labor expert Todd Vachon from Rutgers has indicated that highly visible strikes can raise public awareness about barista issues, leveraging customer relationships as a potential influence.
Sales Performance
In the latest financial reports, Starbucks’ same-store sales grew by 1% between July and September, marking the first increase in nearly two years.
In her first year, a new leader implemented changes focused on enhancing customer hospitality and adjusting staffing to better manage busy periods.
Starbucks is also working to prioritize in-store ordering, moving away from a heavy emphasis on mobile sales.
Recently, the introduction of holiday drinks and related promotions saw great success, and specialty Bearista cups sold out quickly, although the company hasn’t confirmed if they will be available again before the holiday season ends.
