business news in context, analysis with attitude

Yesterday, we took note of a CNBC report that organized labor representatives are asking Starbucks to extend pay hikes and improved benefits being offered to non-union employees to those workers working in stores that have voted for unionization.

Starbucks said no, and that it can't - that once a store has been unionized, those employees have to go through collective bargaining before contract changes are made.

The union, naturally, disagrees.

I commented:

While I've not been a fan of how Schultz has dealt with the union threat - it's been all arrogance, no humility - I think they're right on this one.  Once employees in a store have said that they want different rules to apply to them, that is the reality with which they have to live.  Now it is up to those employees to send their union reps to the table, charged with getting an equal or better deal.

I got differing reactions to this.

One MNB reader wrote:

I have to disagree with your point on this one. You state that it’s up to union reps to try to get an “equal or better deal”. They already did that, by requesting that Starbucks extend the already-offered benefits to the union – and Starbucks refused, after misrepresenting that they aren’t able to do so. It’s just union-busting tactics, and petty and mean-spirited ones at that.

But another MNB reader chimed in:

Unionizing has consequences.   It would be foolish of Starbucks to give union members the same as non union members and then start bargaining from there.  Unionized supermarket operators have the unfortunate history in most cases to start bargaining from the existing contract and how to give more.  The only bargaining is how to reduce the new demands. Kroger is probably an exception, does their homework and seeks more flexibility to run their business in exchange for higher wages. 

Right now Starbucks has an advantage with only a low percentage organized and geographically disbursed.  The law only requires them to bargain in good faith. If I am them, I would rather take a strike in 3 units than agree to terms that are better than the non union people have and that includes work rules. 

That said, my experience is most unionization is successful when local management is poor or mistreats the associates.  They need to institute an upward management process that anonymously lets front line associates evaluate their managers and company policies.  They will find that 10% or so of their managers are “despicable “and need retraining, new understandings and if they don’t improve, terminations.  

We referenced a story in The Information yesterday about Netflix's plans to offer an ad supported platform, and I commented:

To me, this story is worth reading because there are so many retailers developing their own media platforms, hoping that advertising will bring a new and lucrative revenue source.  But Matt Spiegel, executive vice president of digital marketing at TransUnion, which partners with ad-buying firms to better target their ads, makes an important point:

 “This pie does not grow endlessly.”

Spiegel says that "Netflix, if it can scale, will pull from the same ad market as network and cable television."  And from retail media platforms.

Not only doesn't the pie not grow endlessly, but there also are a limited number of existing slices.

MNB reader Andy Casey observed:

No, the promotional pie doesn’t grow endlessly but if the advance of marketing technology teaches anything it is that the pieces keep getting redistributed. If you don’t keep improving and changing pretty soon you will find yourself with little or no pie or even a Choco Taco.

And, one MNB reader chimed in on the Red Vines vs. Twizzlers debate:

I loved Twizzlers until I looked at the sugar content.  Take a look. 

I don't have to.  I know how bad they are, which is why I eat them so rarely, and hate myself after I plow through a bag.