Starbucks shop in Chicago set for closure towards the end of the month

Kelly Matthews on October 24, 2022

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Throughout 2022, waves of union efforts have hit businesses, but a Starbucks Edgewater store in Chicago will close in two weeks.

It was one of the first stores in the United States to join a union.

The coffee giant has announced plans to close the branch on Chicago’s North Side the day before Halloween.

The announcement

According to the management, the store will close on October 30, a Sunday.

Workers said the closure would take place four days before the negotiation process for their first union contract began.

However, a Starbucks representative denied the accusation, saying the decision to close was due to unspecified security concerns for employees and customers.

The Chicago cafe was among the first to win the union election by a 10 to 1 vote in May.

Retaliation and suspicions

Despite their explanations, Workers United employees and organizers suspect the closure involves October 26.

Workers United is a subsidiary of the Service Employees International Union.

Several employees said the closure was in retaliation for their successful union campaign.

The company moved employees to other stores with little detail on travel times and costs.

Workers United argues that the arrest is part of the company’s tactics and patterns.

Starbucks has already closed ten locations where the organizations have taken place.

The group filed an unfair labor practice lawsuit with the National Labor Relations Board (NLRB).

Nationwide closure

Workers United argues that the closure of union cafes violates the National Labor Relations Act of 1935.

The law is a fundamental labor law statute that guarantees workers the right to form trade unions to bargain collectively.

In March, the NLRB learned that Lost Larson, an acclaimed Chicago bakery, was ignoring the statute and illegally firing an employee.

The employee tried to organize her workplace.

The agreement between the two parties provided that management would not fire or interfere with the rights of employees to raise concerns and complaints regarding the following::

Safety
Wages
Communications
Training
Other terms/conditions of employment on their behalf or the behalf of others

The challenge of proving retaliations

While some cases may be proven, other cases of retaliation can be difficult to prove.

In 2020, several laid-off employees of the Wisconsin-based Colectivo Coffee chain, which has five locations in the Chicago area, filed a lawsuit against the chain.

They said their termination was retaliation for their involvement in the organizing committee of the Colectivo union.

The NLRB found the allegations to be of no merit.

In 2021, however, Colectivo’s pro-workers had the upper hand, forming the largest union workers in a US coffee chain.

Reference:

Starbucks workers claim Chicago shop’s closure is union retaliation

Starbucks’ diversity policy leads executives to a legal case

Jamal Murphy on September 5, 2022

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Starbucks is among the many companies that have highlighted the importance of diversity, and they are keen to emphasize this by adopting new policies to achieve their goal.

However, the policies put in place by the coffee giants have become a problem to some, and the leaders are at the receiving end for it.

The issue

Starbucks Corp officers and directors are the targets of a lawsuit filed by a conservative think tank.

The complaint was born from the belief that the coffee chain’s “woke” efforts have only resulted in racial discrimination.

The complaint

The National Center for Research on Public Policy filed a lawsuit on Tuesday challenging Starbucks’ hiring goals for people of color; outsourcing to “diverse” vendors and advertisers; and executive compensation tied to diversity.

According to the complaint, the push for diversity “benefits them personally to pose as virtuous advocates of ‘Inclusion, Diversity, and Equity,’ even as it harms the company and its owners.

A Starbucks shareholder said the policies force the company to make decisions based on race, benefit minorities, and violate federal and state civil rights laws.

35 current and former executives and directors, including interim CEO Howard Schultz, are among the defendants of the case.

Starbucks and diversity

As of July 3, Starbucks had more than 34,948 stores worldwide, including 17,050 in the United States.

The coffee giant is one of many companies that have focused on diversity and education, particularly in the wake of the 2020 murder of George Floyd.

Six months after his death, Starbucks announced plans to include more black, Indigenous and other people of color in order to gain opportunities for at least 30% of the jobs in American companies.

The company also aims to have people of color make up 40% of U.S. retail and manufacturing jobs by 2025 and to tie executive salaries to its diversity efforts.

In January 2021, Starbucks announced plans to nearly double its annual multi-vendor spend to $1.5 billion by 2030.

The company also pledged to allocate 15% of its 2022 advertising budget to minority-owned and “targeted” media companies.

References:

Starbucks bosses sued by think tank over diversity push in the US

Starbucks executives, directors are sued over diversity policies

Web3 Technology to Enter the Starbucks Rewards Program

Jamal Murphy on August 8, 2022

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Starbucks will be adding some changes to its rewards program, which is one of the most innovative ways a business can keep customers coming back.

Schultz’s statement

Starbucks CEO Howard Schultz has revealed that Web3 will become an integral part of “We have been working on a very exciting new digital initiative that builds on our existing industry-leading digital platform in innovative new ways,” said Schultz.

“All centered around coffee and – most importantly – loyalty.”

The disclosure came on Tuesday during Starbucks’ third quarter 2022 call.

A unique experience

According to Schultz, Starbucks will unveil the new digital initiative on September 13 at the annual Investor Day event in Seattle.

The initiative allows Starbucks to build on its current rewards engagement model, while introducing new ways to emotionally engage customers by expanding the third-party digital community approach and offering a wider range of rewards.

Schultz shared that the rewards will include unique experiences and digital collectibles as a reward and community building element.

“This will create an entirely new set of digital network effects that will attract new customers and be accretive to existing customers in our core retail stores,” he explained.

Web3

Employees are not very optimistic about the coffee company’s relationship with Web3 initiatives.

During a presentation in May focusing on NFTs, an employee named Mark expressed opposition to the plan, citing the environmental impact of NFTs.

“Blockchain, whether it’s proof of stake or proof of work, is not planet positive,” he said.

“It is going to destroy the planet… and it makes me, as a technologist, and I’m not the only one, very worried about that – that this company would go in that direction.”

“I don’t want to feel this way about Starbucks.”

Mark also pointed out that despite being advertised as inclusive, NFTs are more exclusive.

Starbucks and Blockchain

This won’t be the first time Starbucks has dived into the blockchain scene, as they started a bean-to-cup traceability project four years ago.

The project aims to support small farmers.

Whether customers, employees and investors will embrace the Web3 initiative remains to be seen, but Howard Schultz has set it up as part of a larger planned transformation for Starbucks.

“We are looking forward to fully showcasing the power and the opportunity of our reinvention plan,” he said.

Previous reward experience

The plans might not be too much for Starbucks Rewards members discussing the program and its potential changes.

The last major changes to the program took place in 2019 and encouraged customers to air their grievances on social media.

The change involves Starbucks changing the star rating required for free food and drink.

Since then, the rewards program has attracted over 10 million members; Each change affects more people.

References:

Starbucks teases Web3 updates to its popular rewards program

Starbucks just teased changes to its rewards program

Howard Schultz Plans to Close 16 Starbucks Locations with Others to Follow, According to Leaked Video

William Mason on July 25, 2022

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While Starbucks has established itself as one of the most popular coffee brands in the world, people will be saddened to hear that the company will be closing more than a handful of stores.

The news broke last week when a video circulated on Twitter revealing an internal meeting between Starbucks executives.

The video

The Starbucks reunion was posted on Twitter by Seattle radio host Ari Hoffman, who tweeted:

“EXCLUSIVE: Today at an internal meeting CEO Howard Schultz said: “Starbucks is a window into America… we are facing things in which the stores were not built for… we’re listening to our people and closing stores, & this is just the beginning. There are gonna be many more.”

The video has been viewed 337,000 times to date.

It was split into two parts, each at a speed of 1:11.

The meeting

Acting Starbucks CEO Howard Schultz announced the closure of 16 Starbucks stores due to security concerns.

The reports were first published in the Wall Street Journal.

“We are beginning to close stores that are not unprofitable,” said Schultz.

“This is just the beginning. There are going to be many more.”

What led to the decision

On July 13, a Starbucks spokesperson confirmed that the chain would close 16 stores by July 31, citing employee safety concerns.

The concerns were raised in an open letter to employees of Debbie Stroud and Denise Nelson, senior vice presidents of Starbucks’ US subsidiaries.

“You’re also seeing firsthand the challenges facing our communities – personal safety, racism, lack of access to healthcare, a growing mental health crisis, rising drug use, and more,” the letter reads.

“With stores in thousands of communities across the country, we know these challenges can, at times, play out within our stores too.

We read every incident report you file – it’s a lot.”

The letter also reveals that Starbucks is working to improve safety in its stores by training employees on de-escalation, active shooter situations and mental health, among others.

What Schulz said

Howard Schultz said the coffee giants were closing stores (and possibly others in the future) after meetings of staff Starbucks calls “retail partners.”

The interim CEO also said that employees have had issues with Starbucks restrooms and many other issues such as mental illness, homelessness and crime in various locations across the country.

“In my view, at the local state and federal level, these governments across the country and leaders, mayors, governors, and city councils abdicated their responsibility in fighting crime and addressing mental health,” Schultz said in a statement from another leaked video.

Schultz said the company is working on updating its store operations to meet customer needs as customer behavior changes.

“We need to reinvent Starbucks for the future,” the CEO explains in an open letter.

References:

Starbucks CEO on store closings: ‘There are going to be many more’

After Starbucks closes 16 stores, CEO says ‘there are going to be many more’