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Starbucks workers strike, targeting Red Cup Day promotions

Starbucks (SBUX) Workers United is reportedly expecting to organize strikes at 200 store locations across the US, protesting mobile orders for the coffee chain's Red Cup Day promotional day that overwhelm employees, especially when already understaffed.

Yahoo Finance Senior Reporter Brooke DiPalma weighs in on unionized barista's renewed push to pressure Starbucks leadership, including a multitude of complaints filed against the company citing Fair Workweek Law violations.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

SEANA SMITH: Well, as if it wasn't tough enough to make it through a Thursday, some have had to do it without their morning coffee. That's a tough thing to do. Starbucks employees at more than 200 locations nationwide walking off the job today, striking, workers saying that they're taking a stand against what they're calling understaffing and overwhelming a mobile order volumes, especially on promotional days like today. Red Cup Day, we know that this is a very important day here for Starbucks. Just in terms of that promotional activity, more people are expected to try at least to go and get their daily coffees from Starbucks given that promotion. I won't name names. But one of our producers was a little bit upset or worried.

BRIAN SOZZI: I think she's about 80 bucks a day. She's about 80 bucks a day. Oh, not that producer. Yeah, we have like a big team up at Starbucks.

SEANA SMITH: There's a big-- yeah, there's a lot of Starbucks loyalists here. But this just speaks to the larger issue that has been plaguing Starbucks now for quite some time. Obviously, many of their workers very upset with the current terms of pay, benefits. They want to see changes. Starbucks has been routinely pushing back on that.

BRAD SMITH: They should stop letting people order unicorn frappuccinos when they go in there. I mean, I for myself have gotten a s'mores frappuccino, a Barbie frappuccino. I mean, this is all off of--

SEANA SMITH: Well, you're part of the problem then.


BRAD SMITH: I mean, I don't get it frequently though. I only get it when everything else is closed because we know I support local business. But at the end of the day, I think it still does come back to a lot of people who have now had this as a daily part of their routine. And Star Wars-- Starbucks--


Star Wars. Starbucks has done really good at making sure that the rewards customers continue to buy into this experience, this ecosystem. But where is the benefit for some of the workers that are on the other side of that too? And then Starbucks for its own has done pretty well in touting some of the benefits of being one of the team members there, one of the partners as they call them. You're shaking your head no?

BRIAN SOZZI: I shake my head because Starbucks management, new CEO in their, call him Lax, they continue to ignore this issue. This was going on for well over a year. They think it's going away. Newsflash, it's not going away. At some point, you're going to have to address the demands by these workers. And to your point, Brad, they have really strong-- I think they have a strong case here.

They're asking workers to do-- make drinks incredibly complicated. They're having all of this done now on mobile devices. The speed at which they have to create these drinks is just through the roof. And, oh yeah, they want to do a Red Cup promotion. Starbucks has to do a better job of this. And it's not just cutting a bigger check to employees. It's actually giving a damn. I'm just going to say it.

BRAD SMITH: I mean-- and at the same time too they've in some capacities cut down on the number of employees that they keep on shift, which actually makes it even harder to deliver upon some of those customer demands, especially when you know that there is that much more volume that's coming in via mobile as well as the people like me who if I do go into a Starbucks, I'm standing in line waiting longer for my bacon egg bites to come out, I had to walk out one time. And that was in Times Square. That's a very radical type of experience that you have in there.

But that aside--

BRIAN SOZZI: Radical experience?

BRAD SMITH: Yeah, it is.

MADISON MILLS: The most crowded changing possible location.

BRAD SMITH: I mean, Maddie, you're here with us too. I mean, we'd love to know your kind of vantage point on this as the-- I mean, the workers definitely have the green siren caught with the tail split right now.

MADISON MILLS: I just always think about-- whenever I talk about Union strikes, a couple of years ago at Milken I saw a panel where they talked about how the number one lesson CEOs need to learn right now is how to handle Union strikes. And that has totally proven to be true. This is the story of labor for this year and kind of 2022. Certainly going to be the story moving forward for a lot of these company names.

So to your point, Brian, they have to figure this out because it's not an issue that's going to go away, not just for Starbucks, but for every company.

BRIAN SOZZI: And it's just going to get worse. It seems like it's still spreading. And if you're modeling out the five year earnings trajectory of Starbucks, you better factor in more of these stores potentially becoming unionized and the cost of business going up a lot higher. And then to your-- and off of that, your drink is going to be a lot more, Brad. Maybe it's a $10 frappe. I don't know.

BRAD SMITH: My drink is not more. You guys know I don't go there every day, like some people who are walking--

SEANA SMITH: You go there, though.

BRIAN SOZZI: There's a lot of backtracking. There's a lot of backtracking.

BRAD SMITH: When there are no other options, I will go in--

MADISON MILLS: He goes when there's no other options.

BRIAN SOZZI: Yeah, keep the heat on them, Seana and Maddie.

BRAD SMITH: We have people cursing the sky when they walked in this morning because Starbucks wasn't open.


BRAD SMITH: It's not me.

SEANA SMITH: I'm fine with my $2 coffee from the cart guy right on the street. It is the best coffee I think. It blows away the $7 cup of coffee that you're paying for.

BRIAN SOZZI: Well, thanks for hooking us up this morning.

MADISON MILLS: That's a New Yorker too.

SEANA SMITH: Yeah, I'll show you guys. And maybe someone will eventually come over to my side. I've been the biggest proponent of it now for some time.