Starbucks CEO Kevin Johnson is calling for a new stimulus package to save small businesses – including independent coffee shops across America.
“We need Congress to take action,” Johnson said at Starbucks’ investor day on Wednesday.
Johnson joins the chief executives of McDonald’s and Walmart in calling for further aid.
“I think it’s important that we all understand in some ways we are having a shared experience because we are in a pandemic together, but we are having a very different experience,” Walmart CEO Doug McMillon said at the Yahoo Finance All Markets Summit in late October.
“If you have been let go and don’t have income, you really need help,” McMillon continued. “The voice we have at Walmart is to say to Congress and the administration we need you to help those people who need help.”
Stimulus negotiations have dragged on for months, with Congress running out of time to pass a proposed $908 billion bipartisan proposal before the new year.
“The slow negotiations over COVID-19 relief have in recent days boiled down to two major sticking points: the scale of funding to state and local governments, and protections for businesses from litigation by employees who get the virus,” reports Insider’s Mia Jankowicz.
Experts say Starbucks will cash in on the closures of independent coffee shops
Starbucks sales declined during the pandemic, with comparable sales down 9% in the US in the fourth quarter.
However, analysts say that Starbucks is likely to win over customers with the closures of independent coffee shops, as roughly 110,000 restaurants have already closed across the US. On Tuesday, Cowen analyst Andrew Charles named Starbucks as one of his four favorite stocks best suited to capitalize on the $39 billion in restaurant sales that are “up for grabs due to the closure of independents.”
Johnson said on Wednesday that a stimulus package is necessary to prevent closures of small businesses. Starbucks does not want these independent coffee shops to close, Johnson said.
“This is not a competition,” Johnson said. “We are grounded in humanity.”
Starbucks executives expressed optimism about the future of the company, announcing Starbucks expects outsized non-GAAP earnings per share growth of at least 20% in fiscal year 2022. Starbucks updated its fiscal year 2023 and 2024 expectations for ongoing annual non-GAAP EPS growth rate to a range of 10% to 12%, up from at least 10%.
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