Who will be SBUX's next CEO?
Restaurant Business thinks it will be an Educator. With Mary Dillion going to Foot Locker, the choice for the next CEO is an open question. Restaurant Business thinks the person likely to be named as Starbucks’ next CEO is Frank Britt.
"And Starbucks’ imminent remake is already his charge. As of Aug. 22, Britt’s title was changed to chief strategy and transformation officer. As such, he’s now the second-highest-ranking executive in the company, with Starbucks’ personnel operations reporting up to him. He, in turn, reports directly to Schultz. At least currently. Another key clue: Some of Schultz’s comments have been interpreted as indicating the chain wants to give the CEO’s job to an outsider. With only four months under his belt, Britt qualifies for that descriptor, albeit with an asterisk. We wanted to ask him firsthand if he was a candidate, but Starbucks declined our request to interview him. Among the few definitive comments, Schultz has made about the chain’s search for CEO is that there are several candidates. The brand would be foolhardy not to look beyond one person. But when the pieces fall into place, it’s our bet that Britt will be the one getting the corner office. Restaurant Business
I would add that Howard Schultz said on the last earnings call, "all the candidates that we are talking to, we are paralleling the reinvention and modernization plan so there’s no misunderstanding. And I can tell you that the candidates are extremely excited and positive and in agreement with what we’re doing in terms of investing ahead of the growth curve, reinventing the partner, customer, and store experience, and the equity and power of the brand is apparent. No one on this call should think whatsoever that there’s any risk in terms of this plan not being executed."
If Frank Britt is the next CEO, he will be an outsider that has been involved in the planning process from the beginning.
Pro unionization movement in CA
The California State Assembly voted to concur with the Senate's AB 257 last night. The bill will now proceed to Gov. Gavin Newsom, who has until Sept. 30 to sign or veto the bill. With significant exposure to CA, Jack was down 9.6% on the news. SBUX and CMG also have significant exposure to the state.
The California State Senate passed a heavily amended version of Assembly Bill 257, or the FAST Recovery Act, on Monday with a 21 to 12 vote. The bill would establish a council to regulate wages and working conditions for fast food employees. The council would also be responsible for regulating hours and labor relations at fast food chains, defined by the legislation as a chain of more than 100 restaurants sharing a common national brand. Previous versions of the bill applied to chains as small as 30 units and would have also held franchisors responsible for ensuring franchisees complied with health and labor laws. The fast food standards council proposed by the California State Senate's amended version would be composed of 10 representatives: one from the state's Department of Industrial Relations; two representatives each of fast food franchises, fast food franchisors, fast food workers, and fast food worker advocates; and one representative of the Governor's Office of Business and Economic Development. The amended law states the council would be barred from issuing new rules until after "the Director of Industrial Relations receives a petition approving the creation of the council signed by at least 10,000 California fast food restaurant employees." Amendments to the bill also restrict the lifespan of the proposed council. The council's existence is only guaranteed through January 1, 2029, in the California State Senate legislation. Because of the significant differences in franchisor responsibility, council composition, and the petition process compared to the original draft, the Senate bill must be reapproved by the California State Assembly. Failing assembly approval, a bicameral conference committee will bear responsibility for reconciling the two versions before sending the bill to Gov. Gavin Newsom. Newsom has not indicated, as of press time, whether he intends to sign the bill should it reach him. Groups representing restaurant companies and owners said they plan to launch an advertising campaign and deploy franchisees and business leaders to persuade Mr. Newsom, a Democrat, to veto the bill, which they say is the latest evidence of California making it difficult for businesses to thrive.
$20 is the NEW $15
According to a new study, restaurants and other employers need to increase their advertised starting wage to $20 to get job hunters' attention.
Indeed.com revealed that potential new hires are far more likely to search for a position paying at least $20 an hour than they are for one offering a wage of $15. As of August 14th, the number of searches for a $20 wage had increased 35.6% from the 2021 level, while searches for positions starting at $15 an hour had declined by 57.3%. In June, job seekers hunting for a $15-an-hour position fell below even the tally for $25-an-hour searches. The job-listing company noted that the count of potential hires looking for a $20 wage is considerably higher than the number searching for $25 but observed that searches for the latter pay are up 122% YoY.
