🤔You are Starbuck’s newest CEO. Beyond the unions, you have walked into a difficult situation. The most popular beverages sold these days (iced drinks with flavored syrups) are significantly different from the company’s coffee roots, you have a weak business in Europe that hasn’t performed in over 10 years, and a promising business in China who is still opening slowly. On top of all this, you have a workforce of baristas demanding greater operational simplification and automation, which would potentially hurt store experience and drink quality. The other conundrum is that the licensing model, which has fueled Starbuck’s expansion over the past two decades, seems to be at its limit. Licensing has been successful in protecting the Starbucks brand and ensuring a consistent store experience around the world - but that control has come at a cost. The revenue / profits from licensed stores that flow to Starbucks the company are peanuts compared to companies who follow the conventional franchise model. For example, Dunkin’ Donuts enjoys 30-40% operating margins using franchises despite not having anywhere close to the global scale and popularity of Starbucks. Investors are pressuring you to present a vision like your legendary predecessor Howard Schultz. As the new CEO, what would your growth story be for Starbucks?

If Starbucks is already selling waaaaay overpriced drinks, and has to crush unions just to survive, Starbucks shouldn't succeed as a business

Im skeptical about the claim that everyone joylessly sucked down bad coffee before starbucks came in. The cafe/diner as a meeting place has a long history. What Starbucks did was premiumizatuon.

As someone who grew up watching Starbucks come in and crush local coffee shops with their overpriced swill and brutal corporate tactics, this video had me cry-laughing.

Something that isnt mentioned about Europe but noteworthy is that Starbucks entered a market where local coffee chains have a good stronghold and independent coffeehouses are abundant. Europeans also take their local coffee culture seriously whether its Fika in Sweden, Vienna coffee, or the Coffee Bar culture in Italy. That is something hard to penetrate and take over in trying to change local coffee habits. Along with Starbucks is just expensive, like 2-3x more expensive than local coffeehouses from what some European friends have told me. They've basically backed themselves into a corner and seems to only being staying afloat off locations in tourist areas where they get traffic.

I’m in a union and worked in retail, there are reasons for wanting a union other than pay. Stable schedules are one. Your manager having the power to change you schedule at a moments notice is BS. You can’t plan on things from week to week when you don’t have the same schedule. Or if there is a labor or safety violation, unions are better able to handle that than reporting a violation to an underfunded state agency. Unions have their own problems, but you can go the extra mile of the Starbucks Union and be independent. You don’t need to be in the AFL, SEIU or NEA in my case. You can be independent and do what you want. Which is serve members.

One might argue that if Starbucks isn't able to provide adequate pay and working conditions, which is then leading to workers looking to unionise, Starbucks business model is flawed and they shouldn't survive, especially if the only way they can is by exploiting workers.

The strongest arguments for Starbucks being *exceptional* were always just basic human things: A shared 3rd space for people to chat or work in, Baristas that cared about the customer experience, quality coffee, free Wifi, decent interior design, etc. None of these things requires the company domination on top of it. You could get all of this from a good coffee shop in a Bookstore or Library. I wish the Unions luck in their struggle :)

I think it's more of a "chasing infinite growth" problem then survival problem. They clearly can make money while obliging to union demands, so it's not like they'll die if they do. The problem is that they won't make more money year over year, and I guess that's all that matters.

Surprising to me that Starbucks still paints itself as growing, innovative or edgy, or anything other than commoditized F&B. And health wise, how long until the soda tax spills into these Starbucks "drinks" that have more calories than you can count?

I work in a Starbucks in Hawaii. I get $16.25 before taxes. I'd say the average price of a drink we sell over here is about $6-7 and food included its often about $10-15ish per person. We often clear around 10-13kish in revenue every day and this is considered low compared to what we were doing per-COVID. One apsect of unions negotiations which I feel were not adequately brought up were guaranteed hours. Living in Hawaii the cost of living is quite exorbitant. Despite me pestering my boss for more hours constantly, I'm averaging about 30 to 25 hours a week. Nobody on my store's schedule is full time except my manager and the average amount of hours between the 20ish partners at my store are about 20-24 hours a week. For a store that's consistently bringing in about 13k a day you'd figure we'd be able to afford more hours for our partners, but corporate continues to cut hours and our manager is constantly understaffing because as she descibes it "we are not earning enough to justify our hours". Higher wages would be nice but at this point I'd be happy with just being guaranteed enough hours to pay my rent and buy groceries. Overall working for Starbucks isn't bad but I can never see myself making a career out of this and I pray for anyone who attempts to do so.

I never understood the immense draw of Starbucks, and places like it, because drinking a coffee milkshake every day seems to unhealthy to ever justify, and if I want black coffee, I’ll make it at home for 20 cents a cup rather than have it at Starbucks for $4 a cup. I just get my slave produced coffee the boring way.

By the way, you know it's a grift when they start talking about all these vague, massive, indefinable causes. "There are millions of children in Africa who can't even afford basic medicine or a visit to the doctor... and Starbucks is going to vaguely try to make that better, somehow, we promise." Not "we need to help our local community", not "we need to focus on small-scale issues we can tackle", not "let's help some of our displaced and homeless veterans who were abandoned by the VA and their families", no no, it's "Africa", it's the "starving children in Africa". The person who wrote that probably couldn't name a single country in Africa but it's fine, it's totally not a grift guys, they're gonna do it. That's why African kids aren't starving anymore, Starbucks sent them sugary drinks and cheap pastries and now they're all full and healthy. Oh wait, shit...

The best thing people can do is to buy from (small) local coffee shops and make coffee from home.

So they can't pay their workers their worth because they're spending that money on corporate social responsibility?!

As an Australian I am proud that we hate Starbucks

I very recently quit Starbucks after being a supervisor at corporate owned stores for 4 1/2 years and a barista at a licensed store for 2 years. This video really perfectly illustrated how all they care about are ever growing profits and higher and higher margins. What people seem to forget is the human aspect of it all. Tell me, how is someone supposed to pay rent earning $15/hr with an unpredictable schedule? You get hired as "full time" and are expected to have full availability but one week you might get lucky to get 35hrs and the next 30. It might not sound like that dramatic of a difference but 5hrs of pay can be the difference between paying the phone bill or buying groceries. Many people rely on working multiple jobs and having roommates just to get by. Even getting a second job can be a difficult game to play because then you have to change your availability and risk loosing even more hours. Does $20/hr sound like a lot? Of course. But when you take into account the ever rising cost of housing it should be a no brainer that wages go up as well. As a supervisor at Starbucks, it drove me crazy seeing week after week our record breaking sales while also being told we just couldn't afford more labor. It's a function of capitalism to squeeze as much production out of workers for as little cost as possible just to chase growing margins for the people at the top while the ones actually working struggle to survive.

Also just a fun fact, Starbucks in Poland charges basically exactly the same prices as in USA, despite the wages being much lower (and also most products being much cheaper). So you're paying like 3-4 dollas equivalent, but when you compare it to wages it's like they would charge 20 dollars. And people still buy it. Its crazy. They made coffee into a luxury and unfortunately other coffee shops also charge crazy now, because Starbucks set the tone for coffee in the city being a crazy expensive item.

Infinite growth is not possible, yet it’s treated like the norm. It’s time to unionize

People will simultaneously evangelize about how great our economic system is while simultaneously describing it as what can only honestly be seen as a hostage situation. “If you cut into our profits by asking for a higher standard of living we will leave you unemployed, we will stop building housing, we will stop providing healthcare” threatens a group of people completely unaccountable to anyone or thing. It can only be described as an abusive situation for the fast majority of people who do the work these people profit off of.

The problem with Teavana (and DavidsTea in Canada) is that tea has a much more varied product landscape compared to coffee yet the potential for customized drinks is much smaller (until bubbletea/boba started trending in NA in the late 2010s). These vendors often act as a gateway to acquire first time tea drinkers who almost always move on towards smaller independent vendors and stop buying products from Teavana which by the nature of its business model has to source lower quality ingredients wholesale and sell for higher markup.

They don't have to crush unions. They have to, like most businesses, re-examine pay scales, especially bonuses. The c suite isn't worth what they've been paid.

If Starbucks can’t survive as a unionized store then I guess we have progressed past the need for Starbucks.

They threw socially responsible when they started to illegally bust unions. I really don't know know why there is no mention in this video of the 20 billion in stock buybacks planned over the next several years. Seems that would be relevant to this subject.

I appreciate this video very much, since it can be hard for the public to get an accurate view of the company as it has changed through the years. One thing I think would have been an essential point to highlight is that, while many systems have been simplified and standardized for ease of adoption, the job of barista is incredibly complex and takes a plethora of skills to accomplish well. Starbucks wants to paint baristas as entitled children, when there is no Starbucks without the hands that assemble their (now sole) product. Complex beverages require attention to detail to create them to the highest standard. Customers will carry notes from baristas at their home store when they travel, because what they want is so specific that the customer cannot explain it themselves. That speaks to the ongoing relationships that require baristas to mediate their time, use communication skills to translate requests into recipes, and incorporating feedback across visits so that customer is getting exactly what they want every time, no matter who is on bar. I have seen baristas I've trained get married and have kids, or become professionals in adjacent markets. I have customers drinks that I can never, ever forget (Half caf, five shot, venti, four pump, breve, with whip, no sprinkles, cinnamon dolce latte, which I haven't made since Obama's first tenure in office.) They want to pay baristas like all they do is press buttons and mop floors, but also want to encourage customers to request 20 ounce, bone dry, coconut milk cappuccinos (preposterous.) Without baristas forging connections that go beyond coffee and cream, there's no reason to pick Starbucks because that's what has made their model so unique. There's no energy quite like that of a fully invested Starbucks partner. We dance, we sing, we draw on cups, we memorize the routines of entire households, we put the raw sugars in after the shots but before the milk, we scrub toilets, we tell jokes, we comfort grieving customers, or congratulate milestones. It's a job that becomes more than a job and it was easier to do before the company pivoted to selling caffeine laced sugar shakes. They can either make the job fit the pay, or pay their employees what they're worth. But insisting that what baristas do is nothing while it's everything they make their money from is asinine.

There is something so beautifully hilarious about how Starbucks has to pay its employees subpar wages in order to seem like a progressive, forward thinking company that *wouldn't* pay its employe- sorry, I mean "partners" subpar wages.

I would have actually put more emphasis on why Unions really stepped up as the option so many employees needed, instead of leaving us with the ‘low skilled worker’ moment from earlier. As the modifications grow and the pressures for drive times mount to 40 second and lower window times, the labor has turned from one of pressing a button on a 2010 automated coffee machine to one of a skilled, fast, highly mobile worker. They also had to go down to skeleton crews. The labor slashes are unbelievable. Under 400 hours of labor for an average store per week, often significantly lower. Try juggling 20-30 employees with that, with openings often earlier than 6am and later than 8 or 9. That’s skeleton crew hardcore. So now one barista has to do the job of 3, and the store manager has to do the job of every person they employ. Next, add in hypocritical leadership who use corporate jargon to pressure managers into making crackdowns on people to improve profit margins while infringing on their people. Slashing hours last minute without notice, going directly against federal and state guidelines. Not making repairs. Slashing all hours for clean play shifts to maintain health and safety standards in stores. Writing up employees who stay late to ensure all tasks are done since they didn’t have the people to handle rushes close to shutting their doors that night. Temperatures can regularly reach into the 90’s, with no stores able to control their own thermostats. Seattle/corporate headquarters does that. The New York stores had bee infestations that were reported to multiple high levels of management but it wasn’t a priority and they kept endangering customers and workers, and choosing to save money on repairs and orkin visits just to increase the P&L in the store. They regularly slash hours as well to remove tenured workers, thereby removing the largest partakers in their more expensive benefits programs, and getting rid of the workers who attained the highest wages due to multi year raises even as low as 11 cents a year. It’s crazy. That was my raise one year as a shift manager. 11 cents. I was outraged. Tenured workers are also the ones most likely to want to unionize because they remember when they were treated with dignity instead of disposable chattel to toss shit in a cup in 45 seconds or termination. Then they slash the hours of the part timers so that they make less than the required 20 hours to receive benefits at all. And then they encourage managers to fire those not meeting 12 hours a week. But when you cut a store with 30 employees post crackdown to 380 or less hours, you now have to choose between the part timers who can more easily find another job, or the full timers who have rent to pay and kids to feed. It’s super super difficult, and starbucks acts like they have the moral high ground still, and provide a family environment. Unless you get a store manager that fights against this at the risk of their job, their head on the chopping block the second they have a single underperforming week, you’re getting shit on, laws broken concerning your wages and your schedule, and constantly in fear of easy replacement at the drop of a hat. Seen from the inside, it’s way worse than this video shows. It’s a rotting corpse on the inside, consumed by Kevin Johnson and left to bloat by Schultz after his latest return.

Uh yeah I worked as a shift supervisor ten years ago and I can personally say that I've never had a good experience with corporate Starbucks. I never felt appreciated or valued, everything they do felt very "smoke and mirrors", and my coworkers felt the same way. Things like being called "partners" instead of "employees" since everybody got like 2 cents a year in company stock. They do these to sounds nice and progressive when in reality I'd make more from a 5¢ raise than the bonuses. On a personal level it wasn't better. I worked with a young kid for about a year, we closed together 5 nights a week. Nobody knew, but he was struggling and tragically took his own life one afternoon when he was supposed to be at work. He shot himself in the head. I'll never forget the feeling I got in my stomach when I found out why he didn't pick up when I called to ask where he was at when he didn't show up to his shift. Once word broke and we figured out what happened, I called the district manager to tell her I was shutting down because everyone on shift was crying. On top of just... Being human and letting us grieve, we weren't going to be able to provide service with a smile after that. She told me that was absolutely unacceptable and hung up. I got a call from the store manager 5 minutes after also telling me it was unacceptable to close. So I turned my emotions off and sent my crew home, running the store by myself until close. I was written up the next day for sending them home as there's supposed to be two people in the store at all times. Needless to say, I quit after that and never went back. All of this is on top of permanently running skeleton crews, low pay, and general bullshit that every fast food worker deals with. Anyone who thinks Starbucks is any different or better than other fast food companies are under a delusion. It's been bad for at least a decade, but I suspect longer.

Former starbucks barista here, one of the first things they tell us is that we’re aren’t Starbuck employees, we’re Starbucks “partners” because we’re one big happy coffee community. As if we aren’t service workers being worked to exhaustion and having to deal with rude customers all day under a mega corpo. Funny how the sense of community evaporates when we demand common and decent worker rights. Support local coffee shops, if you can. :)

You can't be a socially responsible company when you take advantage of your workers.

This video showcases how fragile this entire system is, and that we are all collectively living on economically borrowed time.

Starbucks doesn't seem to be doing so great in Washington or Oregon anymore. They bought out every independant cafe that crossed their path in the 00s & now they're getting absolutely crushed by Dutch Brothers. Any coffee place who doesn't have lavender & Irish cream on the flavor list isn't getting a penny from me.

People now say things like "if you don't like it, leave". That's always the solution. We never expect anyone to advocate for a better, more economically reasonable experience for consumers and workers. It's about time to get back to that.

It would have been interesting to see a bit more of a macro view with regards to the economic situation Starbucks was in over the period of time evaluated for the figures. Like how much they received in covid relief, how much they increased profits as a reaction to inflation, what if any bonuses or stock buy backs were made by executives etc. I think this would have been helpful to determine if Starbucks truly couldn’t survive this wage increase, or if they couldn’t survive it because like every other corporation they didn’t practice good stewardship to weather the economic storm and instead, insulated shareholders, and tried to pass the reckoning off to consumers and employees to just suck up and take the hit.

Starbucks has become the "target" of coffee and cafes. Upping the stars needed for rewards was the final straw for me, ill be buying from local cafes with personal touches from now on.

As you say, zoomers & millenials are 80% of Starbucks' customer base now. I don't have any data, but I have a hunch many millenials, and a majority of Gen Z, actively support the unionization efforts' and probably find the current Starbucks media representation as traditional, scorched-earth, and union-busting. This characterization is a lot more damaging to my eyes than being seen as a legacy food service brand, because at this point that's kind of what Starbucks is. Who will they turn to if they alienate all the young people from their customer base?

Every time customers are mentioned, he really means American customers. The rest of world already had coffee.

If a business can’t survive when forced to treat their workers right… maybe that business shouldn’t exist. Edit: finished the video and apparently Starbucks would survive just fine. Just slightly more margin going back to workers instead of investors. Seems fine to me 🤷The workers are the ones actually creating most of the value.

As the observation goes, they'll spend untold millions to avoid shelling out thousands to workers. And I'd add, Amazon hiring Pinkertons for union busting isnt exactly subtle either.

they'd only shed 4% profit to give their empolyees a decent wage. If a company can't pay its workers then maybe it shouldn't exist

Dude, I’ve been watching this video for almost 3/4 in and we haven’t gotten to the Union part…

I used to work at a starbucks yet my one pet peeve with the company is that, they pride themselves for their service yet only pays the employee's minimum wage. Other companies does this as well but sometimes I wonder, what do they do to compensate for the extra service that the employees are expected to provide?

The way they treat their employees is like how you would treat a dog that you don't really like but have only to show your friends that you're a caring, respectful and responsible person. Actually tragic how they let their best employees go instead of digesting the concerns and addressing the growing issues they face as a corporation.

If you need to limit your employee’s rights and stomp on their well-being to succeed, you shouldn’t be allowed to succeed

The thing I didn't quite understand was outlined in another comment, that the drop in profit margins could have compounding effects. It's probably also important to note that those are hypothesised effects, and it's unclear if they would actually happen or not. Those being: their ability to sell stuff for the markups that they command is totally dependent on their brand image. So, if the brand is seen as not being worth as much, then customers might not be willing to pay the same markups. But, I don't know. It seems like the very public union battle could have the same effect, right? Investors aren't the ones buying retail drinks, and retail customers aren't looking at profit margins. But the retail customers would be more likely to have read about the union busting (even if most wouldn't care). It all is very uncertain, but it just seems like the public battle could have similar damaging effects as taking the union demands at face value. It seems like they should've just negotiated from the start, but I don't know. Obviously there are more factors at play, and a lot more information that they don't share in the public reports that might be influencing this decision

Starbucks would be running into a lot fewer of these issues with unions if they redefined their labor practices on a corporate level. The things that kind of skated by mention in this video but is most important is not that the wage is totally unreasonable at Starbucks locations, but that their corporate restaurants are encouraged to overhire and then under schedule all of their employees shy of 25 hours/wk. This allows Starbucks to “provide healthcare to all workers” but hold all but a few workers below the full time wage threshold, which pushes most of the healthcare costs onto the employee and off of the business. I have a feeling that if people felt like they could consistently rely on getting 30 hrs/wk if they were a good worker then Starbucks would have a lot fewer demands to deal with and a much easier negotiation route to avoid unionization.

Every business channel sets ads to the maximum setting, not realizing it makes people leave early

"there is not a coffee company with our ability behind the counter in terms of flavors, syrups, modifiers, foam". Maybe cause they make, idk, coffee?

It's unbelievable to me how condescending it is for them to call their employees "partners" while treating them like numbers. It's so insulting that they seem to think their employees won't be able to see right through that, and it shows how little they really think of them.

I hope the unions succeed

I'm still angry that Teavana was closed down because of Starbucks. It was my favorite place to get tea because I could sample it in the store. Like, I know that there are better places to get tea, but Teavana was accessible.

Worked for Starbux back in 2008 it wasn’t a coffee company, it was a pastry and milkshake company…

All of this to say that SB would have to earn 10% marginal profit instead of 14% to pay their workers a decent wage.

So the only way to remain a "socially responsible" business is to crush unionization? That is some 1984-level ideological absurdity there.

A cheerleading video for Starbucks, finally coming to it's conclusion at 27 that if Starbucks allows unions, it's profits will drop slightly and then it will lose it's image and look like any other retail food service company, ie Chipotle

Something that isn't mentioned about China but critical is that Starbucks' growth in China has actually slowed massively in recent years due to competitive pressures from up and coming players such as Luckin Coffee, as well as disruptions caused by the pandemic. This means Starbucks could no longer rely on China to be its growth engine, and had to return to relying on North America for increasing profits. But with NA already so saturated, there isn't much room left to grow revenue, thus they could only turn to cost-based approaches such as the anti-unionising efforts we currently see. I made a video talking about Starbucks' downfall and Luckin's rise in China due to differences in business strategy, product innovation and effects from pandemic disruptions, might be useful to you.

16 mins out of 29 and I haven’t heard about the union busting.

There is a universe where baristas of today don’t exist because without Schultz’s business they don’t have a place to exist. I bet Schultz sees it that way. One thing he did was turn cheap labor (arbitrary drink mixing) into non cheap labor (non arbitrary drink mixing). He calls Starbucks “retail” but “can I have that same shirt in large” is much easier than the normal Starbucks order.

First, SB should scale way back in Europe, to only what’s profitable (read, tourist areas). They can’t compete on quality or price when you can get a better cappuccino at a truck stop for less money. Besides, Europe still has national worker protections which the US and Asia lack. SB is an older well known company, time to stop promising shareholders unrealistic growth. SB will lose to the drive to unionize. If they work with unions now, they will lose less in contract negotiations and in public opinion. The public health crisis & 2008 changed everything for a generation. And this generation has access to real information, 10 years of virtue washing can be wiped away with a few TikTok posts. If you want to be seen as a beneficial market leader, you actually have to be one.

Great video, interesting to see that when it's all said and done it's all about the numbers. Lip service to social responsibility etc falls apart when it's not on the CEO's terms. Only worker cooperatives can truly have the worker's best interests at heart.

So they could appease unions but they want to make more profit than less? Or to personify the company, they don't want to face that they have achieved much of their growth already so have stuck their head into the ground; they want to maintain high growth operating margins when they are now a matured, lower growth firm?

This is why sectoral bargaining is such a critical idea for service sector unions. A place like Starbucks isn’t incentived to unionize out of a fear that a non union shop will beat them on costs. Sectoral bargaining eliminates that issue because most shops and workers will negotiate a price for labour.

One hour of work they can’t pay for some of those drinks.

This is always tough to analyze, most ppl admire what Starbucks is as a brand, how they transformed an everyday product into high margin, high end brand. It’s sad Howard has taken this approach to his workers, I try to stay away as much as possible, but too many ppl ignore how they treat their employees! Another great, insightful video 👍

To make the fact about the really low wages paid in asia worse, the prices they charge in their branches there were adjusted to match US prices(I realized this during my visit the Philippines this year). I understand the import fees and taxes but they could atleast make an effort to closely match the wages that US employees get.

Unions actually work for us the middle class. Look at union trade workers making 30 plus an hour. While most people still make 10-15 an hr.

It's not just the margins, EV would drop like a stone when everyone reads the news and rush to sell Starbucks stock. In the eyes of every shareholder, nothing good can come from unions

Question: Why no mention of the $25 million deal Pre-IPO with Square ($SQ) now renamed as Block? - They did the deal in 2012, the IPO for Square was in 2015. It was an innovated part of the Starbucks rewards app. The amount of finance transactions that take place in the "Bank of Starbucks" as gift cards, points, cash-less tips, etc was a huge deal to move money around quickly.

If you can't operate a business while paying your employees fairly, don't operate a business.

"You see where this line meets this line? That's why no workers should be able to pay their rent." This idea of infinite growth forever is both a fantasy for 99% of companies and is making the world a far worse place.

I recently started a job in the autoglass industry. Turns out, my district manager was one of their union busting scapegoats. She got fired and brought a bunch of her Starbucks buddies to my company.

It’s amazing that Starbucks - Union-crushing Starbucks - is kind of used as a shorthand for “leftist” by a lot of pundits and politicians on the right.

A lot of this seems to come back to the fact that the two CEOs who aren't Schultz have actively gone against the fundamentals that Schultz used to build the business to begin with. Were those moves being made in pursuit of allaying shareholder concerns, or is it just catastrophically different ideas about the future of the business? When you said that Schultz was leaving and handing off the reins to his COO, I thought it'd mean less of a sudden course change than the last time he left, but then you immediately led into the selloff of the CPG business, which seems fundamentally antithetical to what Schultz was trying to do. Do we have any idea what's behind this higgledy-piggledgy approach across CEOs?

Wait, they want $20 / hr? I haul paint for a living; that means I drive a van or box truck, navigate jobsites, lift hundreds of 50lb. buckets in a day, build and break pallets, tint paint, and operate a forklift for $18.50 / hr.

Not surprised at all! This is the same man who bought the Seattle Sonics and then sold the team to a group formed for the sole purpose of buying an NBA team to move to Oklahoma City. This is after threatening to move the team, if the city and state didn't cough up the money to build him a new Arena. What a piece of ****

Don't you sense the irony in that concluding statement? "In order to maintain a forward-thinking image, Starbucks must prevent unionization at all costs." Yet, crushing unions will inevitably deteriorate the company's social capital as a champion for corporate social responsibility that it tries so hard to protect. Starbucks' means to preserve its reputation is actively ruining it.

You think starbux introduced coffee to the masses? Wtf?

If anything about the crazy prices of eggs and other low margin food products has shown us this last year is that there is less price elasticity than was assumed. So why can't Starbucks pass on all of the added labor costs for US unionization to the US customer? I'm surprised they haven't already raised prices and blamed unions for it, whether they were responsible for the increase or not. And since when is maintaining margins justification for violating the law? A company that is not only accused of, but found guilty of, multiple NLRB violations, doesn't deserve to have a respected corporate image.

Starbucks has lost its way. The model was supposed to invoke that of the Italian cafe, simple espresso and coffee and a social hub for the community. Now it’s a sugar dispenser with cars packing its drivethru and that community isnt there, people arent getting coffee unless it’s an additive to their milkshake or pink drink. They’ve destroyed their own mission statement and can’t afford to keep its employees well paid while also keeping costs to minimal levels to ensure maximum profit. You see the same thing with Teavanna, a pretty miserable offering to anyone who is serious about tea in the same way people love single origin coffees, they could have added quality tea to their menu and educated the American consumers base on fine teas in the way they did for coffee but instead they opted for cheap tea with sugary flavorings or fruit added which only cuts the costs but also gives the consumer less real tea for higher prices. They deserve what is coming, a business that can’t stand with its work force shouldnt stand on top of that same workforce to make its profits.

Excellent and thorough analysis as always. You make an exceptionally clear point on how much of this is smoke and mirrors, and it makes me wonder whether we would be in this spot today if the previous CEO had not sold off the CPG segment for an immediate payout, which would increase margins and give more wiggle room for unions to exist.

Stop buying from Starbucks.

This video has a very strong smell of Starbucks sponsorship against unions.

We imagined the 2020s with flying cars, conscious robots, space travel, and we got obnoxious stores that sell overpriced coffee and practize good old union busting.

if your business can't afford to pay and unionize baristas then it shouldn't exist

I would rather just get a McFlurry from McDonald’s

Here in the Philippines, Starbucks introduced coffee drinking culture to the whole country. Their coffee shops are so relaxing that most people wants to hang out in their coffee shop. They also pioneered these modern interior design that now most coffee shops are adopting. Its overpriced, coffee is not that gooo however the starbucks experience is just at the top

Reading about the efforts to unionize the Steel Industry between the 1880s and the 1940s, you see the same action. Steel workers, even before unionization, were among the highest paid workers. The problem was work schedules (no over time, 12 hour work days AND requirement to work eight 12 hour work days a week, yes that meant a worker had to work 24 hours AND still work 12 hours a day the other six days of the week, no notice to be laid off from work, no medical treatment, even if injured on the job). Carnegie always said his workers were the key to his success and said he took care of them, but fought efforts at unionization to the max. Just because someone has some progressive ideas (In the case of Carnegie free public libraries) does not mean they will not use whatever is "legal" to prevent unionization.

If a company can't compensate its employees fairly without dying...it should've never existed. Considering OP hates Uber and its variations, he must hate Starbucks too.

Starbucks always does the right thing for it's employees😂😂😂😂. Can't believe you said that...

There’s some pretty large discrepancies in the math here. 1) The number used In the video to describe worker wages didn’t factor that it was for wages AND benefits, which the benefits half would actually go down, not up, because the amount paid for by the employees goes up since benefit witholdings are a percentage of wages. 2) a large chunk of those wages is not going to be increased at all by a $20 p/hr starting wage because it’s the compensation of employees such as executives, managers, and GMs who all make substantially more than 20 an hour already. 3) starbucks margins are lower than they should be because starbucks owns way too many corporate locations which have much lower margins than franchises. Most companies at Starbucks scale have almost no corporate owned locations or are actively transitioning to a 100% franchised strategy, which raises margins. It’s unreasonable and not mathematically sound to say raising wages would impact margins as much as this video states.

In my country, Thailand, most people go to Starbucks to use their laptops/phones for work/study and stay there for the entire day, ordering a few drinks and maybe a croissant. The coffee isnt even that important.

Starbucks doesn't go after unions in Europe cause it doesn't need to. The unionization mechanism in USA creates too much asymetry between companies with unions and those without.

Not just Starbucks, every company must crush unions for very obvious list of reasons.

So you admit the title of this video is false? You concluded Starbucks would survive just fine with a union- it would merely result in slightly lower margins for investors, with more of the profit going to workers… the ones who actually create most of the value for the company.

If there is one thing I took from this video, it's this - what is defined as "coffee" has become very vague because of Starbucks.

Blows my mind that a big ass company like this can't just give basic worker protections or it'll crumble. If you'll crumble bc you're treating your people right, then you shouldn't exist then.

You outline really well why the goal of high profit growth is fundamentally at odds with worker and customer wellbeing. Corporate social responsibility is only ever a hollow marketing tactic, because if these businesses cared about society like they care about continuous profit growth, they would be non profits. Or they would be begging democratic governments to buy them out. In our messed up system, its not enough to be a stable, moderately profitable business offering a reliable service. The top business owners and shareholders enjoy their outsized power and the upper middle class shareholders are terrified of falling into poverty so the vicious cycle goes on...

Did Starbucks pay for this video?

Very thoughtful commentary… quick question though: When we are talking about the image of Starbucks suffering with a few percentage point dip in operating margin… we are talking about the image in the eyes of investors and investors only- is that correct? The brand image to the investors is important… but for a mature business like Starbucks…. A hit to valuation does not strike me as fundamentally disruptive compared to a similar shock to consumer/employee confidence. I just doubt the average consumer/employees would know or care if operating margin adjusted down to industry standard.

There never was business in any industry at any time where unions weren't an existential threat. At least, that's what the management says. Then, how much their employees need to pay their rent isn't the management's problem.