“Red Cup Day” has become a hotly anticipated event for Starbucks fans every year.
It marks the day the company officially launches into the holiday season, releasing the reusable holiday cups that can carry its coffee drinks throughout winter.
Now, timed to coincide with Starbucks lovers’ unofficial holiday, a labor strike looms as Starbucks battles sales declines, operational overhauls, and rising union pressure.
Thousands of workers are expected to walk out during the annual Red Cup Day event, protesting, among other issues, the large gap between CEO and worker pay, according to Workers United, the worker-led unionizing effort.
The planned strike will affect hundreds of stores in 25 cities nationwide and comes as the company struggles to reignite growth after several disappointing quarters.
The timing could hardly be worse for a brand trying to balance major operational changes with pressure from Wall Street to improve performance.
When is Starbucks’ Red Cup Day?
Red Cup Day has become one of Starbucks’ most powerful marketing tools, signaling the start of the holiday season and driving a major spike in sales. Analysts estimate it can boost November traffic by up to 20% at participating stores.
This year, Red Cup Day is November 13, 2025.
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The de facto holiday’s success has, however, turned it into a flashpoint for labor tensions. Baristas say the annual promotion highlights the same issues they’ve been raising for years — high stress, unpredictable scheduling, and lack of adequate staffing during heavy-volume days.
Workers United has accused Starbucks of delaying contract talks and retaliating against union supporters. Starbucks denies those claims, saying it’s negotiating in good faith and that store staffing levels are based on real-time data and sales forecasts.
“Any agreement needs to reflect the reality that Starbucks already offers the best job in retail, including more than $30 an hour on average in pay and benefits for hourly partners,” Starbucks Spokeswoman Jaci Anderson told AP.
Related: Starbucks closes more stores in a key market
In a letter to Starbucks employees released Wednesday, Starbucks’ Chief Partner Officer Sara Kelly said the union has proposed a 65% pay increase immediately and a 77% increase over three years, with additional payments for weekends or days when Starbucks runs promotions.
Kelly also said some proposals would significantly alter Starbucks’ operations, such as giving workers the ability to shut down mobile ordering if a store has more than five orders in the queue, per AP.
Starbucks is a company in transition
Starbucks’ most recent earnings report, released in late October showed that same-store sales in North America fell 3%, while global comparable sales declined 2%.
Traffic was down across several regions, and executives acknowledged that higher prices and weaker consumer sentiment were weighing on demand.
But while the company works to streamline operations, many baristas say they’ve been asked to do more with less. Workers United, the union representing Starbucks employees at roughly 550 U.S. locations, says understaffing has become chronic — especially during major events like Red Cup Day.
What a Starbucks strike could mean
If the strike is widespread, it could dent sales on one of Starbucks’ most important promotional days of the year — though the financial hit is likely to be modest in absolute terms. The greater risk, analysts say, is reputational.
The strike also comes as Starbucks faces rising competition in both the premium and convenience coffee segments. Fast-growing chains like Dutch Bros, along with McDonald’s McCafé and even convenience-store operators, are targeting Starbucks’ customers with lower prices and faster service.
Meanwhile, inflation continues to squeeze discretionary spending, with some consumers cutting back on daily coffee purchases or switching to at-home brewing.
Starbucks and the labor landscape
- 650+ stores have voted to unionize since 2021, covering roughly 12,000 workers.
Source: The Guardian - Starbucks operates more than 16,500 stores in the U.S., meaning fewer than 3% of locations are unionized — but union campaigns continue.
- $9.1 billion: Starbucks’ revenue for the fiscal third quarter of 2025 was down 2% year over year.
- $20 billion: The total the company has pledged to return to shareholders via dividends and buybacks over three years.
- 34.3 million: Active members in Starbucks’ U.S. loyalty program, up 6% from a year ago, according to company filings.
Source: Starbucks
What Starbucks investors are watching
Starbucks shareholders may be wondering how the strike affects the company’s ongoing turnaround plans and whether these remain on track. The company has promised to return billions to investors, even as it invests heavily in store remodels and new technology.
But maintaining that balance will depend on stabilizing U.S. traffic — which makes any operational disruption, however symbolic, significant.
Earlier this year, TD Cowen analyst Andrew Charles share with MarketWatch that Starbucks faced disgruntled customers and increasing competition, which may jeopardize turnaround plans.
How the potential Starbucks strike reflects broader employment issues
The Red Cup Day strike is part of a broader wave of worker activism across the U.S. Volkwagen workers in Tennessee just voted to strike, and musicians on Broadway have threatened to strike.
Union filings at Starbucks have slowed since peaking in 2022, but workers continue to press for wage increases, predictable schedules, and better working conditions.
Since the first Starbucks location voted to unionize in Buffalo, New York, in late 2021, the National Labor Relations Board has issued more than 100 complaints against the company for alleged labor violations — many of which Starbucks has contested in court.
What Starbucks’ possible strike means for investors
- Labor image risk: Starbucks’ union conflict could damage brand loyalty among socially conscious consumers.
- Short-term volatility: Even limited strike activity may create short-term operational costs and headline pressure on SBUX stock.
- Long-term pivot: The company’s turnaround depends on rebuilding morale and trust with both employees and investors — a critical factor in restoring traffic and margins.
How Starbucks’ competitors stack up
- Starbucks Corporation (NASDAQ: SBUX) is down about 18% year to date, underperforming the S&P 500.
Source: MarketWatch - Dutch Bros Inc. (NYSE: BROS) has delivered over +19% return in 2025, gaining momentum as a fast-growing rival.
Source: MarketBeat - Visits at Starbucks stores were down 0.1% year over year in Q2 2025, while those at Dutch Bros jumped 13.8% in the same period.
Source: Placer.ai
For Starbucks, the Red Cup Day strike is about more than one holiday promotion. It’s a test of how much pressure the company can absorb as it attempts to rebuild growth, loyalty, and its workplace reputation all at once.
The coffee giant is betting that investments in store efficiency and digital convenience will win back customers. Workers, meanwhile, are betting that a visible, high-traffic event like Red Cup Day is the best time to make their voices heard.
Either way, Starbucks’ holiday season is starting under a cloud of uncertainty.
Related: Fast-growing coffee, cafe chain files for Chapter 11 bankruptcy
