Starbucks Union Snubs 2% Pay Hike Ahead Of Q1 Earnings — Retail Stays Upbeat

Representatives of a union of Starbucks baristas have rejected the coffee chain's latest proposal that guarantees annual raises of at least 2%.

According to Reuters, 81% of some 490 baristas in the United States who were eligible to vote in the negotiations called the offer "insufficient" as it did not include an immediate hike and benefits like healthcare.

The negotiations have been dragging on for a year, and the latest development could delay CEO Brian Niccol's business turnaround efforts.

Starbucks said in a statement that the union presented an incomplete framework for single-store contracts to their delegates to vote on, adding that its actions were causing a delay in reaching a mutual agreement.

Investors will likely put up questions at the company's first-quarter earnings on Monday.

According to Koyfin data, analysts expect Q1 sales to rise 3.4% to $8.85 billion and adjusted profit to drop 29% to $0.49 per share.

On Stocktwits, the retail sentiment was 'bullish,' but message volume was low.

A user posted that they were unsure about Starbucks' prospects, given the discretionary nature of its offering.

Another user countered, saying there is a high likelihood of improvement under the new management.

Starbucks has made several changes in recent years. Early last year, it cut its workforce by 15% and hired Niccol in September.

Under Niccol, Starbucks is revamping its menu and cafes and cutting order times, among other initiatives. 

The company suspended its forecasts for 2025 late last year to give Niccol freedom to pursue its restructuring.

Starbucks shares have lost 8.2% year to date.

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