Earlier this month, Starbucks (NASDAQ: SBUX) found itself in the midst of controversy, facing boycotts and protests after filing a lawsuit against the Workers United union.
The dispute stemmed from a deleted social media post expressing support for Palestine in the wake of Israel’s recent Gaza bombings. Surprisingly, the stock weathered the storm and even surged post-earnings report, beating Wall Street estimates.
However, a fresh headwind arose on November 16, as thousands of Starbucks workers initiated a one-day strike, posing a new risk for the coffee giant’s stock.
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What happened?
As reported by several outlets, employees at over 200 Starbucks stores in the US walked off the job on Thursday, November 16, marking the biggest strike in a broader 2-year-old effort to unionize the company’s stores.
Workers United, the same union Starbucks sued over its pro-Palestinian social media posts, staged the walkout on Red Cup Day, which has historically been one of the busiest days for the year.
According to the union, it was expected that more than 5,000 employees would participate in the so-called ‘Red Cup Rebellion.’ Workers were supposed to picket for several hours and visit non-union stores for the rest of the day, Workers United said. A day prior, on Wednesday, workers at roughly 30 stores also walked out.
Employees are demanding from Starbucks to bargain labor contracts that would establish certain conditions at unionized stores, such as pay, benefits, and staffing levels.
“It’s degrading and embarrassing to work in stores that are so short staffed on promotional days that we give customers poor service. When customers spend $10 or $12 on a drink, they shouldn’t have to wait 45 minutes or get a lukewarm drink when it should be hot.”
– said Moe Mills, a Starbucks employee at a store in St. Louis.
Starbucks stock price analysis
Shares of Starbucks were standing at $107.21, up 1.1% in the past 24 hours.
SBUX gained 4.5% over the past five days and more than 13.8% on the month.
Year-to-date, the stock is still up just 6.3%, underperforming the broader S&P 500 index, which rose almost 18% during this period.
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