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Starbucks Holiday Threatened as Strikes Move to 9 States

Starbucks Workers Hold "Red Cup Rebellion" Strikes Across The Country
Kevin Dietsch / Getty Images News via Getty Images

A strike by workers against Starbucks Inc. (NASDAQ: SBUX), which initially closed stores in three cities, has expanded to nine states. That figure could grow, and Starbucks faces a hit to its sales and the possibility of negative public opinion.

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Effects of the Strike

Starbucks spill
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Colorado, Missouri, New Jersey, New York, Ohio, and Pennsylvania stores joined the labor action during the weekend, according to CNN. This added to locations in Chicago, Los Angeles, and Seattle. The union representing the workers, Starbucks Workers United, said its actions would close hundreds of stores, but whether that is true is impossible to prove. It also said the strike involved over 10,000 workers, a number that also cannot be confirmed.

The strike is small compared to the number of Starbucks stores, a total of 15,270 in the United States, according to the company’s count at the end of September. Starbucks has not released the worker count for the United States. It has over 346,000 worldwide.

Starbucks management told CNN it has bargained with the union for nine “sessions” and 20 days since April.

There is no way to tell how much the action will hurt Starbucks’ revenue. The current strike is unlikely to make a significant dent, but if the involved store count grows, it could affect Starbucks’ already anemic U.S. results.

What is less clear is whether the worker claims will affect the public. New CEO Brian Niccol wrote to workers and customers that reputation is critical to the company’s success: “Our stores will be inviting places to linger, with comfortable seating, thoughtful design and a clear distinction between ‘to-go’ and ‘for-here’ service.” Some customers will believe that the strike has weakened that message.

Starbucks North American said U.S. sales dropped 6% in the most recently reported quarter. The stock is down 8% this year, against the S&P 500’s 24% increase.

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