New York City‘s newly elected mayor Zohran Mamdani called for a boycott of Starbucks starting November 14. His intervention has amplified a rapidly growing conflict that now threatens to become one of the company’s most serious crises in years.
Mamdani, a progressive and vocal labour rights activist, threw his weight behind the strike. On X, he said, "Starbucks workers all over the country are on an Unfair Labor Practices strike … While workers are on strike, I won't be buying any Starbucks, and I'm asking you to join us. Together, we can send a powerful message: No contract, no coffee."
His appeal is more than symbolic: To urge a boycott is about demanding serious corporate action in advance of tough contract negotiations.
Thousands of Starbucks employees have struck work over stalled negotiations with management, which the union says has failed to address unfair practices and resists genuine talks.
Starbucks, meanwhile, says the disruption is limited. Less than 4 percent of its retail workforce is unionised, and most stores remain open.
The ‘Red Cup Rebellion’ of the union could get bigger. If negotiations fail, the number of striking stores might increase rapidly, presenting a deeper reputational and financial risk to Starbucks, according to the statements made by Starbucks Workers United—the union at the fore of the protests.
The ongoing criticism about workers’ treatment could also undermine its image as a progressive and community-friendly brand and potentially spook investors cautious about structural labour issues.
So far, Starbucks has defended its labour practices, arguing that the union’s expectations are too aggressive. A Starbucks spokesperson expressed disappointment and told The Guardian that “Workers United, who only represents around 4 percent of our partners, has voted to authorise a strike instead of returning to the bargaining table,” adding that “When they’re ready to come back, we’re ready to talk.” The company has also maintained that its existing contracts already offer some of the strongest retail jobs in the market, including average pay of more than $30 an hour and a range of additional benefits for its partners.
The company, however, has to juggle labour demands with a reputational crisis without driving away its core consumer base. It must reassure a network of franchisees, employees, and other stakeholders that business will remain stable—even as the political heat turns up.
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Starbucks had then released a statement which strongly dissociated any monetary or military support for Israel and condemned violence, instead favouring peaceful dialogue. The controversy took a business toll: Its Middle Eastern franchisee, Alshaya, in early 2024 laid off around 2,000 workers as boycott pressures rose, citing “challenging trading conditions”.
Similarly, while the labour dispute involving Starbucks in the US has stirred global conversation, so far there is no indication that it will affect the brand’s operations in India. The Mamdani-union controversy appears to remain confined to the US network, and in India there have been no disruptions in stores, footfall, or sales.
During this time, India’s café market itself has expanded rapidly. US-based market analysis firm Grand View Research in its 2024 ‘India Coffee Retail Chains Market’ report found that the country’s coffee retail chains market was valued at $564.3 million in 2023, with strong structural growth expected at 8.1 per cent a year through 2030. Rising urbanisation, higher disposable incomes and a shift in café culture among millennials and Gen Z were cited as major drivers.
All of this has meant growing competition for Starbucks in India. The ‘India Coffee Retail Chains Market’ report identified Starbucks, Café Coffee Day, Third Wave Coffee, Costa Coffee, Tim Hortons, Blue Tokai and Indian Coffee House among the key chains shaping the market. Blue Tokai opened its 100th store in 2024 and aims to reach 200 within 18 months, while Nothing Before Coffee and Pret A Manger have also accelerated store launches.
Profitability, too, continues to remain a challenge. Tata Starbucks reported a net loss of Rs 135.7 crore in FY25, widening from Rs 82.16 crore in FY24, even though operating revenue grew by 5 per cent to Rs 1,277 crore. The growth was driven largely by new store openings, while like-for-like demand remained soft, the annual report showed.
Footfall also eased in late 2024, and at the time Tata Consumer Products chief executive Sunil D’Souza cited weaker discretionary spending as the reason during an interview with the Financial Times. He stated that the company opened just over half of the 30 targeted stores for the October to December period, adding only 16 stores in that quarter compared to 29 in early 2024.
The company has also opened its 500th store in the country and continues to invest in local menu development, digital ordering and Starbucks Reserve formats.
Although expansion has slowed temporarily, the company still aims for 1,000 stores in India. D’Souza noted earlier that the timing may extend by about a year either side of 2028 depending on economic conditions. He also spoke about increasing its localised offerings, which already includes chilli paneer sandwiches, masala chai, Picco cup sizes and lighter store interiors.
First Published: Nov 22, 2025, 10:48
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