Starbucks Retail Traders Eye Buying The Dip As Barista Strike Erupts In Dozens Of Cities, Weighs On Stock

• Over 1,000 Starbucks baristas affiliated with Starbucks Workers United launched an indefinite strike Thursday evening.
• They demand better wages and the resolution of certain legal disputes; the union has previously accused the Starbucks management of refusing to negotiate in good faith.
• SBUX ended 1% lower on Thursday, although its Stocktwits sentiment shifted to ‘bullish’ from ‘neutral’ amid an insider buy.

Retail investors expressed caution as Starbucks baristas kicked off a strike in dozens of U.S. cities on Thursday, with some expecting the company’s shares to slide to $75-$80 level in Friday’s session.

Starbucks stock ended 1% lower at $84.4 on Thursday and rebounded marginally in the after-market session. Over 1,000 Starbucks baristas affiliated with Starbucks Workers United launched an indefinite strike at stores in over 40 cities, demanding higher pay and staffing levels at the coffee chain.

Some stores were reportedly shut down Thursday evening, though a Starbucks spokesperson told Reuters that only 1% of its cafes had been disrupted by the end of the day.

Some Retail Investors 'Buy The Dip' 

On Stocktwits, retail sentiment for SBUX shifted to ‘bullish’ from ‘neutral’ the previous day, with some users expecting to buy shares as they dip. 

“$SBUX Obviously heading back to 75,” a user forecasted. Investors have been closely watching Starbucks’ stock as CEO Brian Niccol rolls out sweeping changes to revive the coffee chain. More recently, he announced the shuttering of hundreds of underperforming stores following major changes to the in-cafe experience, ordering, and menus.

The development adds to investor concerns following Starbucks' reporting lower profit for the last quarter, partially offset by a successful deal for its China business. The coffee chain did not issue a forecast (the company withdrew its annual forecast just after Niccol joined), although it might issue broad guidance at its investor day in January.  

Union’s Demands

Starbucks Workers United called consumers to skip the coffee chain during the barista strike, adding that the union workers are “prepared for this to become the biggest and longest ULP strike in Starbucks history,” according to its X post on Thursday.

The union workers are demanding higher wages and addressing certain legal disputes, having previously accused management of refusing to negotiate in good faith. 

Niccol joined Starbucks last September and vowed to address the staff concerns at the time. However, talks between the union and the company ended in December, after stretching for months. Lynne Fox, the union's international president, reportedly said on Thursday, "A year into Niccol's tenure, negotiations have gone backwards after months of steady progress and good faith negotiations."

In April, the union voted to reject a Starbucks proposal that guaranteed annual raises of at least 2%, saying it did not offer changes to economic benefits such as healthcare or an immediate pay hike.

In separate news, a Starbucks director purchased $1 million worth of company shares on Monday, according to a Starbucks SEC filing on Thursday.

So far this year, Starbucks’ shares have declined 5.3%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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