Starbucks and its baristas have resumed their contract negotiations, and staff may have some help from the new SEO.
Last month, Starbucks reported a challenging quarter with a three percent drop in US same-store sales and a seven percent decline in traffic, prompting a cut in the 2024 forecast.
CEO Laxman Narasimhan acknowledged cautious consumer spending.
He highlighted the need for store improvements, including addressing incomplete mobile app orders and reduced customer visits.
In his remarks to analysts, Narasimhan cited issues union workers have been raising.
Those include investments in equipment, process improvements, staffing, scheduling, and waste reduction to create a more satisfying work environment.
He said these efforts aim to de-risk the business while improving the workplace for employees, referred to as “partners.”
In an interview with CNBC’s “Squawk on the Street,” Narasimhan said the company has improved service speed and plans further enhancements with better processes and tools, especially during peak times.
This acknowledgment of store challenges aligns with the union’s demands for better working conditions.
“I do believe that we are seeing the company at this point acknowledge that there are issues, significant issues”
The union, Workers United, sees Narasimhan’s admission as promising.
Union efforts began nearly three years ago in Buffalo, New York, under then-CEO Kevin Johnson.
The movement has grown, with over 430 unionized stores and significant progress in contract negotiations.
The union and Starbucks are working on a framework for individual store contracts.
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Michelle Eisen, a Workers United delegate and an original member of the first organized union in Buffalo, said: “I do believe that we are seeing the company at this point acknowledge that there are issues, significant issues.
Internal surveys consistently show that “staffing and scheduling” are top priorities for union-represented partners, many report frequent short-staffing and insufficient hours.
Starbucks claims progress in staffing and scheduling over the past two years, with an advanced model that considers historical trends, current conditions, and upcoming promotions.
The company plans to expand its mobile order and pay app to non-rewards members in July and introduce the Siren System to improve order processing times.
Former CEO Howard Schultz has also called for management to spend more time with workers to understand their challenges, marking a shift from his previous combative stance against the union.
