Starbucks sales rose to a record high in the second quarter of the coffee chain, but its profits were affected by rising labor and ingredient costs and as additional stores went down. unionize.
The Seattle coffee company, which welcomed us back former CEO Howard Schultz last month as interim leader, he said revenue rose 15 percent to a record $ 7.6 billion in his 13-week quarter, which ended April 3. This was in line with Wall Street estimates, according to analysts polled by FactSet.
But net income rose just 2 percent to $ 674 million. Starbucks ‘adjusted earnings of 59 cents per share fell below analysts’ forecast of 60 cents.
On Tuesday, after a series of meetings with workers across the country, Schultz unveiled $ 200 million in additional investments in pay and worker training. This includes salary increases for employees who have been with the company for at least two years, as well as a doubling of the training time of new bartenders and shift supervisors.
Starbucks is also reintroducing an employee coffee dominance program and is considering other benefits such as increased downtime due to illness.
But there is a problem: workers who have voted to join a union or shops that have applied to hold union elections will not be eligible for these benefits. In contrast, U.S. labor law requires stores to negotiate their own contracts with Starbucks.
On Tuesday, workers at more than 250 U.S. stores had filed petitions with the National Labor Relations Board to hold union elections, labor organizers said. Fifty of those stores had voted in favor of unionizing with Workers United, a branch of the International Service Employees Union.
While union membership has been declining for decades, interest in organized labor has increased during the pandemic. Starbucks isn’t the only one facing an increase in unionization efforts among its employees, with Amazon workers at a Staten Island facility vote in favor of unionization.
These efforts occur amid labor shortages across the country and as a record number of Americans quit your jobgiving more influence to workers who want to unionize.
$ 15 an hour this summer
Starbucks announced a $ 1 billion investment in employee wages and benefits last fall, with a plan to raise the wages of U.S. workers to at least $ 15 an hour this summer. Schultz said Tuesday that these increases will give stores the workers they need to handle customer demand.
Schultz opposes the unionization effort, insisting that the company works best when working directly with its employees. But he noted that employees are under “tremendous stress” due to strong customer demand and pandemic-related changes in the business, including an increase in mobile and car orders. The new investments will improve the hiring and retention of employees, he said.
“We need to reintroduce joy into the customer and emotional connection to the partner’s experience,” Schultz said Tuesday at an investor conference.
Starbucks said its in-store sales (or in-store open sales for at least a year) rose 7% globally during the second quarter, surpassing Wall Street’s estimate of 6.5%. This was largely due to the strength of the business in North America; International sales in the same stores fell 8% due to coronavirus restrictions in China.
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