NEW YORK (AFP) – Interim Starbucks CEO Howard Schultz (AFP, pic below) unveiled fresh investments in United States (US) stores and employees on Tuesday as the company seeks to head off a unionisation campaign, while it reported strong North American sales.
Schultz, the longtime architect of Starbucks tapped as interim CEO in March, said the company plans USD200 million in additional investments in “our core US business” in 2022.
“We do not have adequate capacity,” said Schultz, outlining new investments on store equipment and technology needed to address rising and shifting demand as more consumers order via mobile channels.
Schultz also announced another wage hike in light of staff turnover that accelerated during the pandemic. “We’ve always been ahead of the curve, but we have to recognise that we haven’t done enough,” said Schultz. “And I think we have to recognise that there is a lot of pressure on our people.”
The announcement came as Starbucks reported a 2.3 per cent rise in profits to USD674.5 million in the quarter ending April 3 following a 14.5-per-cent jump in revenues to USD7.6 billion.
The coffee giant scored a 12-per-cent jump in comparable sales in North America, while suffering a 23-per-cent slide in China amid that country’s latest Covid-19 outbreak.
Shares rocketted higher during the conference call, as Schultz emphasised the solidity of demand, noting the company had enacted multiple price hikes over the last year with only a “negligible” impact on sales.
The new employee investments come as Starbucks faces a unionisation campaign at US stores that has accelerated since a pair of upstate New York stores voted to unionise in December.
Some 250 Starbucks stores have launched unionisation campaigns in the US, with employees voting for a union in 47 stores, said the group, Starbucks Workers United.
