Starbucks Employees Strike on Red Cup Day
Workers from over 100 different Starbucks stores walked off the job last Thursday, coinciding with Starbucks' Red Cup Day. This is a promotional event where customers would receive a free reusable holiday Starbucks cup if they ordered a seasonal beverage.
The strike was organized to protest Starbucks’ failure to bargain with unionized stores and with their failure to adequately staff stores. Red Cup Day is historically one of the busiest days of the year for Starbucks, and this year’s event was no different. It’s also one of Starbucks’ most profitable days as well.
Striking on a day that would impact both the staff and the customers is a sure fire way to really bring attention to the issues. Workers hoped the strike would also garner attention within individual communities. All while the staff continue to explain why unions in the workplace are needed.
Currently, over 260 different Starbucks stores have unionized since December 2021. Over 2,000 workers across the country all went on strike. This covers over 100 different stores and 25 different states.
Starbucks Workers United have accused the company of delaying and dragging out bargaining sessions for a first union contract and filed numerous unfair labor practice charges with the National Labor Relations Board. This board then went on to issue 39 complaints against the company, covering over 900 unfair labor laws.
We’ll see if the poor publicity affects Starbucks’s sales this quarter. We’ll also be watching to see what new practices Starbucks implements as the citations pile up.
Current State of Big Box Retail
Target and Wal-Mart each just reported earnings last week. But both companies provided a different outlook regarding the current state of the retail sector. For instance, Wal-Mart stock soared after reporting earnings, while Target’s share price plunged, dropping over 7% this week.
The rival big box retailers are both known to offer a wide range of products, including, food, clothing, home goods, kitchen supplies, groceries and much more. Coincidentally, both CEOs each took over their respective brands in 2014.
But the two biggest players in the sector each offered vastly different outlooks, which only magnifies the differences between each company.
On Tuesday, Wal-Mart actually raised their guidance for the rest of the year, after quarterly sales rose 8%, heading into the holiday season. Meanwhile, Target went on to slash its remaining forecast after sales rose just 2%.
Target Vs. Wal-Mart
We learned that grocery sales make up over 55% of Wal-Mart’s annual revenue. A significantly bigger share of total sales when compared to Target. This has helped make Wal-Mart the country’s largest grocer by revenue.
While Target also sells groceries, their variety of products is much smaller than Wal-Marts. More customers turn to Wal-Mart to do the bulk of their grocery list shopping. While sales for luxury items like electronics have dwindled thanks to inflation, core expenses like food continue to stay robust.
Another factor working in Wal-Mart’s favor, the perception of being a discounter seems to be giving it the edge over Target. This has allowed the company to flex its size and scale to help keep costs low. Their low prices have been bringing in new customers, including more higher-income households.
Interestingly enough, Target leads the way when assessing ‘impulse buys’, with 26% of sales being considered as ‘unplanned’.
What it Means: Wal-Mart and Target are the two biggest players in the retail space. But with such large market caps, the two are looking at different ways to maintain future growth. Wal-Mart has begun prioritizing food sales and its lower costs as a unique identifier to maintain sales.
Sports Fan Tokens Rally As Crypto Plunges
Despite crypto currently being out of favor on Wall-Street, as the FIFA World Cup looms, sports fan tokens are rallying. Defying the rest of the crypto market which has continued to struggle.
Fan tokens are cryptocurrencies that represent membership to a community, and in this case, premiere access to a sports team's fan base. Token holders can express their support to a team, while they receive specific perks, including game tickets, or even the potential to help vote on key front office decisions within the franchise.
The rally coincided with the start of the World Cup, being held in Qatar. The event will conclude on December 18th after crowning a new world champ.