Starbucks has long served up more than just coffee, offering political statements with each and every cup of joe that they serve. In January, the CEO of Starbucks responded to President Donald Trump’s “refugee ban” by pledging to hire 10,000 refugees. Now, only two months later, he is learning the devastating effects of such a decision the hard way as things continue to get worse for the liberal company.
Almost immediately after making the well-publicized announcement, Starbucks’ stock crashed, but that’s not all.
Unfortunately for the coffee giant, things have continued to decline since the controversial announcement. Credit Suisse, the Swiss financial services company, warns that the plan to hire 10,000 refugees is negatively impacting sales and damaging the Starbucks Brand.
“Our work shows a sudden drop in brand sentiment following announcement of the refugee hiring initiative on Jan. 29th, to flattish from a run-rate of ~+80 (on an index of -100 to +100). Net sentiment has since recovered, but has seen significant volatility in recent weeks,” equity analyst Jason West wrote in a research note. [Source: CNBC]
Another YouGov survey reported that, before the announcement, 30% of respondents would consider spending money at Starbucks. After the hiring policy was publicized, the number sharply fell to 24%.
A look at the #BoycottStarbucks phenomenon on Twitter explains much of the fallout. While bad for Starbucks, the announcement appears to be helping their competitors, like Dunkin’ Donuts:
— Veterans Love Trump! (@SteveMotley) March 10, 2017
As one user says, “Friends don’t let friends drink Starbucks.”
— TRUMP (@Team__Trump) March 10, 2017
Conservative companies like Chick-fil-A appear to be reaping some of the rewards of the movement as well:
— Fred Wimpy (@fredwimpy) March 10, 2017
Not only are people avoiding Starbucks coffee, they appear to be avoiding Starbucks stock, as well.
— George Mohring (@gmohring) March 10, 2017
Liberal celebrities can often get away with political statements that do not sit well with the American public, as their movies and television shows are a diversion from reality anyway. A brick and mortar chain, like Starbucks, however, earns its profits by selling things. In a competitive market, political opinions matter.
Publicity is bad for Starbucks right now, and imagine how much worse it will be once those 10,000 refugee employees are in place and people start seeing controversy first-hand in the coffee shop or, even worse, find that their coffee is becoming substandard or even tampered with.
Few Americans trust a refugee from a terror-related country to pour their beverages, especially not at premium prices. Now, it may be time for you to refer your friends to Dunkin’ Donuts.