Starbucks (NASDAQ:SBUX) is increasingly a union shop. With more and more stores bringing in the union label, Starbucks has to deal with collective bargaining across a range of its locations. But with mixed results overall and a surprisingly resilient customer base, just how much impact unions will have is unclear. Starbucks is down somewhat in Tuesday afternoon’s trading as it addresses the union concept.
While unionization is, at least theoretically, a big change, the actual results of said change aren’t exactly working out the way the unions likely would have preferred. Around 300 Starbucks locations are now union shops in the United States. That’s out of a total of 15,974 as of about two weeks ago. Earlier today, the North Las Vegas Starbucks voted to unionize, so that’s one more in the barrel. Yet despite this, not one of those newly-minted union shops has negotiated a contract with Starbucks. BTIG analysts say that those negotiations might take the rest of this year to conclude and may still not produce anything concrete.
Those who do vote for unionization do so for a range of reasons. The San Jose workers did so in protest of hourly staffing cuts as well as safety issues. Wages, staffing, and “mental health issues” came up in North Las Vegas. Not that the unions are wholly blameless; the New York Post revealed yesterday that a union organizer had been paid $50,000 by unions before testifying before Congress but never mentioned the payoff as is required.
However, analysts remain split on Starbucks’ overall future. With 11 Buy ratings and 10 Holds, Starbucks stock is considered a Moderate Buy. Plus, SBUX also offers investors 16.54% upside potential by virtue of its $116.82 per share average price target.
