Starbucks is heating up as China headwinds, union pressures fade
Bruce Bennett/Getty Images News

The unionization push at Starbucks Corporation (NASDAQ:SBUX) has slowed a little more than a year after the first store in Buffalo, New York voted in favor of creating an union, according to Associated Press. While labor organizers still hope to negotiate union contracts, thousands of employees are unconvinced of the upside. 
In the last 13 months, a total of 358 Starbucks stores have petitioned the National Labor Relations Board to hold union elections. Petition activity peaked last March, when 69 stores asked to hold elections. The pace has subsequently slowed considerably with 13 stores petitioning to unionize in November and 11 stores in December. 63 stores followed up their petition process with a vote not to unionize.
Labor organizers have accused Starbucks (SBUX) of utilizing hard-nosed tactics, including firing pro-union workers and closing unionized stores. For its part, Starbucks has reminded workers that non-union stores will see wage increases and other benefits. The coffee chain operator has also blamed the union for delays, saying it hasn't responded when Starbucks proposes bargaining dates. A hearing before an administrative law judge at the NLRB is scheduled for June.
Looking past the union headlines, Bank of America has a very favorable view of SBUX for 2023. The firm's Buy rating is underscored by attractive coffee market growth and economics, as the specialty coffee segment continues to outpace that of overall foodservice globally. SBUX is also seen having benefits from a strong U.S. business, which contributes 80% of EBITDA and tailwinds from growth in loyalty membership and a resilient retail business. SBUXâs transitory China challenges and U.S. margin pressure are said to create a particularly attractive buying opportunity for long-term investors.
Shares of Starbucks (SBUX) rose 1.31% in Tuesday afternoon trading and already up 5.25% in 2023.