Starbucks is getting back its visionary leader in Howard Schultz, but the master motivator and orator is unlikely to have enough juice to squash the union movement well underway inside of its store, experts think.
“I don’t think so,” said Bloomberg Intelligence analyst Mike Halen on Yahoo Finance Live, when asked if Schultz will be able to end the union movement. “I think the union has Starbucks in its sights. They have a lot of momentum. I think this could be moving faster than most people predicted.”
Starbucks shocked everyone on Wednesday by announcing the return of Schultz, who is not too far removed from a failed presidential run.
With its stock down 25% in the past year (pre-Schultz announcement, which sent shares popping by 7%) and union efforts picking up, no doubt the company’s Steve Jobs (former Apple CEO) will be back in action. Schultz will assume the top job on an interim basis when current CEO Kevin Johnson retires on April 4.
Schultz previously served as Starbucks CEO from 1986 to 2000 and then returned to the helm of the company from 2008 to 2017.
Starbucks said it hired an executive search firm and anticipates to find a new permanent CEO by the fall.
Schultz re-enters the Starbucks C-suite at a much different time for the brand than when he left it, to say the very least.
The company is battling surging inflation for everything from food to worker wages as the economy kicks into gear from the pandemic.
Meanwhile, Starbucks’ more than 5,500 China stores are at risk for a sales slowdown this year as COVID-19 resurfaces in China and the country moves quickly to impose new lockdowns.
But no other issue is bigger on Schultz’s plate than the union movement well underway. If it continues to gain traction, it could dramatically alter Starbucks margin structure — among other factors.
In late February, baristas at a Starbucks cafe in Mesa, Arizona, became the third store to vote in favor of union representation, reports Yahoo Finance’s Dani Romero.
The location is one of dozens inspired by last year’s union vote in Buffalo. That store became the first of Starbucks’ workers to vote for union representation, in the face of the coffee giant’s open opposition. After the eligible vote count, 25 workers at the Mesa location voted in favor of the measure, compared to three who voted against unionization.
More than 100 locations across 26 states have filed a petition for union elections since the first three Buffalo-area stores moved for a union vote in late 2021.
Yahoo Finance’s Dani Romero contributed to this story.