New Starbucks CEO making in-store changes after 6 months as a barista

[buckguy]

My take is that this is a "nice idea" but if doesn't rapidly lead to changes at the store level, any good will is likely to be lost quickly.

Starbucks' real problem is that they are a mature business that operates multiple types of stores, which theoretically should make them more than just the sum of their parts---the sort of thing typical management 'solutions" ignore. They have limited growth potential in the US and this might be true overseas---they entered Asia and Europe in the mid-90s, even before they had entered some large markets like Atlanta. They haven't introduced much in the way of new items and the refresh they did of the food items a few years ago didn't go far enough. Something as simple as a drive through probably works better under some conditions than others---they lose the impulse purchases, so a mostly drive thru needs more volume to compensate. The ones on long haul travel routes seem to get little business--people want a comfort stop and once in the store they might buy something else. The most successful model is probably a busy sitting area and drive through so that you can maintain a constant level of staffing and not expect too much multi-tasking. They seem to achive this is some suburban locations.

When Starbucks spread across the US they often bought or aggressively competed with local operations, driving them out of business and easily rolling over weaker operators like Caribou. Now the regionals seem to going after their traditional coffee house trade (e.g., La Colombe from Philly) and some also do well with suburban locations (e.g., Biggsby's in the Midwest). Some have not done well--Fillz from Philly recently left DC and even Nestle's ownership did not lead to Blue Bottle succeeding on the East Coast. They also have to compete with places like Bluestone (from Australia) and Tatte (from Boston) which bridge the coffee and light meal trade better than Starbucks or dying operations like Corner Bakery. Even small local chains like Phoenix and Arabica in Ohio seem to be doing fine, as well as iconic single shop operations like Aurora in Atlanta. Starbucks needs to figure out what "edge" will win people away from their upstart and otherwise successful competitors, which they've not really had to do in the past.

If the CEO had worked his way up the business I'd have more confidence than doing this kind of effort. Starbucks is a large operation and his understanding of the organization and the different parts at multiple levels may ultimately be the only way he can move the company in a direction that will sustain it in the future.

[ClownLoach]

Interesting news update today. The third party investigation of Starbucks found no evidence of a strong anti-union playbook or operation. Furthermore the statistics indicated no difference in the number of disciplinary actions or terminations between union and nonunion stores. They're treating everyone the same. This investigation was expected to validate the concerns of the unions and instead proved them wrong. They said Starbucks had made missteps, but mainly that they needed to get more union involvement and policy written with regards to different procedures for the discipline of union employees. As we all know, when there is a clear policy violation the union rep generally is sitting next to the boss, shaking their head at the employee as they're being fired.

The union immediately after the story came out stating there is no giant anti-union effort responded with statements that this is great, now they need to take apart the anti-union effort (that was just proven not to exist, yep, they don't listen well).

My take is that the anti-union operation went out the door with the termination of Schultz (aka planned retirement that happened much earlier than scheduled) and they probably swept away all of his anti-union cronies with him at the same time to make the apparatus disappear. At the same time, the union no longer has the insane ramblings of Schultz to keep playing for prospective union members so the entire situation has diffused itself. Schultz was the best thing that happened to the union.

I still think the union itself is seemingly inept and powerless and pretty much serves as a union in name/PR only. Supposedly they are still refusing to come to negotiating tables because they don't understand that a negotiation isn't when you submit a list of demands and say "call us when you're willing to meet every single one unconditionally." I do not believe this Union will be around 5 years from now, although I could see other unions step in like UFCW or Teamsters.

[storewanderer]

How many additional stores have unionized in 2023?

How many stores have union votes scheduled out sometime in the next few months?

This just wasn't the right chain to go after. Schultz took it personally and I completely understand his position and response but can also see how he made things worse.

[veteran+]

Who was the "third party"?

[ClownLoach]

Interesting news update today. The third party investigation of Starbucks found no evidence of a strong anti-union playbook or operation. Furthermore the statistics indicated no difference in the number of disciplinary actions or terminations between union and nonunion stores. They're treating everyone the same. This investigation was expected to validate the concerns of the unions and instead proved them wrong. They said Starbucks had made missteps, but mainly that they needed to get more union involvement and policy written with regards to different procedures for the discipline of union employees. As we all know, when there is a clear policy violation the union rep generally is sitting next to the boss, shaking their head at the employee as they're being fired.

The union immediately after the story came out stating there is no giant anti-union effort responded with statements that this is great, now they need to take apart the anti-union effort (that was just proven not to exist, yep, they don't listen well).

My take is that the anti-union operation went out the door with the termination of Schultz (aka planned retirement that happened much earlier than scheduled) and they probably swept away all of his anti-union cronies with him at the same time to make the apparatus disappear. At the same time, the union no longer has the insane ramblings of Schultz to keep playing for prospective union members so the entire situation has diffused itself. Schultz was the best thing that happened to the union.

I still think the union itself is seemingly inept and powerless and pretty much serves as a union in name/PR only. Supposedly they are still refusing to come to negotiating tables because they don't understand that a negotiation isn't when you submit a list of demands and say "call us when you're willing to meet every single one unconditionally." I do not believe this Union will be around 5 years from now, although I could see other unions step in like UFCW or Teamsters.

This was a Bloomberg article that was picked up by another (pay walled) paper, trying to find a link to it for free to share

[ClownLoach]

How many additional stores have unionized in 2023?

How many stores have union votes scheduled out sometime in the next few months?

This just wasn't the right chain to go after. Schultz took it personally and I completely understand his position and response but can also see how he made things worse.

He basically drove a double gasoline tanker into a small bonfire.

I think the problems were very legitimate in specific cases. Starbucks over-expanded including into many neighborhoods which unfortunately were not necessarily safe, as well as many physical buildings which were not necessarily well built or designed for a coffeehouse.

This resulted in stores with serious and recurring facilities problems that irritated the employees because they were not fixed and never could be resolved. Also they had stores that were frankly turned into mini homeless shelters and drug dens. I heard horror stories about the homeless and drug addicts locking themselves in the restrooms and the employees having to go door-to-door in very dangerous areas where most businesses are closed at night, begging to use gas station and other less-than-sanitary restrooms themselves since not all stores had room for a separate employee-only restroom. Then they were slashing the payroll however Wall Street wanted. And employees were not being listened to at all when these concerns were raised as the only thing current management cared about was the bottom line. Plus sometimes the solution to the complaint isn't what they want to hear, for example if your store is in a bad area maybe the best solution is to close your store because armed guards and whatever else will make the store unprofitable and scare away the legitimate paying customers. Most, if not all, of the unionized stores were problematic either due to the building or the location itself.

Schultz returned, stood up and said no to the payroll slashing but then weaponized it and said hours would not be restored to union stores. He added digital tips for credit cards etc. since less people pay with cash and the employees used to get very good tips (the barista I know used to keep all hers all year then would book a two week international vacation to see the world), but again won't turn on the tip prompts at union stores. So they made good concessions to make it a better place to work but weaponized them. They should have just said "you know what, you're right, we made serious mistakes, we are fixing them by doing A B C D and E chain wide which are the changes the union has asked for so we hope that you'll accept these changes." Instead he made good business decisions once again into a bargaining tool, intentionally choosing to disadvantage the unionized stores even to the company's detriment.

With Schultz gone and a CEO that seems to be able to actually see both sides and develop creative solutions, the urgency around the union is muted and it seems to have lost momentum.