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Starbucks’ political activism has backfired

Pro-Palestine activists have encouraged a boycott of Starbucks. Credit: Getty

June 10, 2024 - 7:00pm

For an American company to build and maintain a customer base, it must choose one of two courses: either be apolitical and serve all Americans, or be political in a single consistent direction and serve only some (like Ben & Jerry’s). It cannot be political in all directions at once, or in different directions at different times as fashions or the caprices of company leadership dictate. If it does, it halfway alienates all its customers which, in a competitive market, is as good as alienating them entirely.

This is what is gradually happening with Starbucks, where it has been reported that “trouble is brewing” at the company over a price hike on its drinks as well as fights over unionisation and protests against the company’s Israel stance. For years, Starbucks tried to be all things to all people, which served it well in its product and experience portfolio. The corporation offers olive oil-laced “oleato” coffees and Starbucks Reserve stores for the connoisseur, pink drinks for the young and hip, and then just plain old coffee for the ordinary folks. But in the political realm, this same approach has caused Starbucks a major — and mounting — headache.

Like so many companies, the coffee giant was swept up in the political maelstrom of 2020 and 2021. It pledged $100 million for businesses focused on “advancing racial equity”. It allowed employees to wear activist clothing and accessories to work, provided that the clothing supported the Black Lives Matter movement. In many Starbucks stores, June Pride Month celebrations went from discreet lapel pins to wall-covering shrines.

But when America’s political pendulum began to swing back the other way, these efforts proved far more problematic for Starbucks — which serves American cities as diverse as Seattle in Washington and Sheridan in Wyoming — than they have for Ben & Jerry’s. In 2023, when Starbucks managers began pulling back on Pride displays in stores, workers at 150 outlets went on strike.

Around the same time, the company found itself the target of activist lawsuits from shareholders over its DEI policies. Labour groups began to question the contrast between Starbucks’ political progressivism and its anti-union employment policies. And late last year, most troubling so far for the company’s bottom line, Starbucks found itself squarely in the crosshairs of public passions over the war in Gaza.

The controversy began last October following the Hamas attack on Israel, when a social media account operated by a Starbucks employee union posted the message “Solidarity with Palestine”. Starbucks’ corporate arm, reasonably worried about offending customers, denounced the message and filed a lawsuit against the union for using Starbucks insignia as part of the message. Angered by the suit, Left-leaning pro-Palestinian customers began to boycott the company.

Boycotts tend to be inflated in the media, but evidence is mounting that this one should be taken seriously. Following underwhelming earnings results in January of this year, Starbucks CEO Laxman Narasimhan cited “misperceptions about [Starbucks’] position” relating to “events in the Middle East”. He tried to play both sides, refraining even from mentioning “Israel” or “Gaza” by name on the call. But the numbers have continued trending downward. Starbucks has now lost 3% of its US sales since last year and, most distressingly, 4% of its highly loyal Rewards members.

Top financial analysts have rejected explanations such as the company’s high prices, and point squarely to the boycotts as the reason. As one commented: “When you look back and you see the magnitude of the shift […] that occurred in such a short time, that doesn’t usually point to something that’s macro in nature or price point-related in nature.” As for the boycott, the analyst added: “You’d really be putting your head in the sand not to think that it has had an effect.”

Would Starbucks have been better off just supporting the union and pledging its support for Palestine? After its centrist retrenchment of the last year, hardly. After all, Israeli partisans are just as capable of boycotts as Palestinian ones. The two lessons Starbucks and other companies should learn from this ongoing debacle are far deeper: first, if you become a political company, you have to pick a side and stick with it. Second, if you already are a political company, if an issue is important to your customers, you cannot claim neutrality, as apolitical companies can. Far better to leave politics to the citizens of our free society, and focus on selling coffee.


John Masko is a journalist based in Boston, specialising in business and international politics.

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T Bone
T Bone
7 days ago

Despite promoting sustainability, Stakeholder Capitalism is completely unsustainable.

If you sell a good product and treat your customers and employees with respect, you will succeed financially more often than not. Do the basics and everyone wins, shareholders included. There’s total interest convergence.

Trying to be a bringer of social change instead of selling quality products will bring chaos. Once you allow moral tyrants a seat at the table, they will seize the table and run you into the ground.

Jonathan Andrews
Jonathan Andrews
7 days ago
Reply to  T Bone

In all walks of life, people do not want to do the basics. Firstly because the basics are a bit dull and you don’t feel that you are making the world a better place. Secondly because doing the basics well is difficult. Employees at Starbucks have to know how to make a variety of drinks, some complicated, they have to keep the place tidy and put up with unreasonable customers.
Easier to put up BLM poster.

Pedro the Exile
Pedro the Exile
7 days ago

Maybe but i would suggest that essentially the job is perfunctory and so folk look for a way to give it “meaning”-the vast majority of people involved in this form of shallow and performative posturing appear to be those who have no internal validity and are constantly looking for external validation-it doesn’t come from serving coffee all day so…..

Jerry Carroll
Jerry Carroll
6 days ago

No wonder so many barristas are unhappy and looking for meaning in empty lives. They picked the wrong college major and are swimming in debt. Radical politics is one way to take the raw edge off and they think — when they do — to blazes with the bosses.

Last edited 6 days ago by Jerry Carroll
UnHerd Reader
UnHerd Reader
4 days ago

Very perceptive! When I read your post, I began to suspect that the whole issue of morally required belief and the epidemic of mental virus infection come from lack of internal validity. Thanks!

John
John
7 days ago
Reply to  T Bone

Indeed

Ex Nihilo
Ex Nihilo
7 days ago

The problem Starbucks has created for itself derives from the same phenomenon that affects modern individuals as well: the desire to appear moral using mimetic desire as their only tool to identify morality. Too many humans care less about being moral than about appearing to be moral. Having never been meaningfully instructed in any transcendent moral code, they are ethical imbeciles capable only of imitating and appropriating the arbitrary attitudes of whatever influencer is ascendant at any given time. Like dyslexics, who can’t distinguish between the letters “b” and “d”, these moral dyslexics are pretending to be ethical beings while actually incapable of distinguishing between wrong and right.

Judy Englander
Judy Englander
7 days ago
Reply to  Ex Nihilo

Excellent analysis.

Warren Trees
Warren Trees
6 days ago
Reply to  Judy Englander

Here here!

Alan Tonkyn
Alan Tonkyn
6 days ago
Reply to  Warren Trees

No, Warren: ‘Hear, Hear!’

Judy Englander
Judy Englander
5 days ago
Reply to  Warren Trees

There there, even!

Thomas Wagner
Thomas Wagner
3 days ago
Reply to  Judy Englander

Now, now…

Pedro the Exile
Pedro the Exile
7 days ago
Reply to  Ex Nihilo

Elegantly put -what i was clumsily trying to convey in a separate post.

Michael James
Michael James
3 days ago
Reply to  Ex Nihilo

These days people usually arrange for appearing to be virtuous to be cost-free. It’s fun to watch what happens when some costs arrive.

Thomas Wagner
Thomas Wagner
3 days ago
Reply to  Michael James

For many, the tragedy of their lives is getting what they wanted.

Peter Johnson
Peter Johnson
7 days ago

Even flying the Pride flag is starting to become a liability. The gay kids in a Canadian high school wrote an open letter to the Principal asking him to take the pride flag down and put the Canadian flag back up. The jist of the letter is that they are sick of the politicization and their class mates are getting angry about it and are taking it out on them.

Allison Barrows
Allison Barrows
6 days ago
Reply to  Peter Johnson

A grotesque councilwoman in my former Connecticut home town replaced the flag that was supposed to hang at half staff at the funeral of a police officer killed in the line of duty. She instead allowed a rainbow piece of fabric (pride “flag”, my *ss).
I hope the voters boot her from office, but I fear whole states have been lost to this toxicity.

Jerry Carroll
Jerry Carroll
6 days ago
Reply to  Peter Johnson

gest

Warren Francisco
Warren Francisco
6 days ago
Reply to  Jerry Carroll

Gist! 😀

Daniel P
Daniel P
7 days ago

Bottom line, I want my companies as non political as possible, both as a consumer and as an investor.

I just want the best service or best product possible at what I am ready, willing and able to pay for them.

I do not want to know about the politics of the companies leaders.

I do not want their staff pushing their agenda’s down my throat when I come in for a coffee or a chicken sandwich or a new set of slacks.

The exceptions to this are:

If they are doing something that is detrimental to the interests of the US or consumers. Example: Offshoring work or storing data offshore or even changing their products to suit a foreign government.If what they are doing causes avoidable environmental harm.If they are spending lobbying dollars to control the market or avoid needed regulation such as with Boeing.

michael harris
michael harris
7 days ago

No serious coffee drinker enters Starbucks.

Daniel P
Daniel P
7 days ago
Reply to  michael harris

They used to be good. Used to love the fact that I could go in there and get a choice of hot coffees on any day. The coffee house vibe, the music and the free wifi were great.

But when they moved away from their core product and their differentiator ( a large selection of coffees all day) and tried to be everything to everybody in terms of product and culture while simultaneously jacking prices, they went to hell.

I’ve also noticed that the employees have changed. Used to be friendly, average folks. Now you get progressive left wingers that all sound like they are mimicking some flamboyant gay character from an 80’s film.

UnHerd Reader
UnHerd Reader
2 days ago
Reply to  Daniel P

Our local SBs specialises in gay and trans staff. The trans are rather scarily weird; almost like somebody with an obviously terrible wig but you have to pretend you never noticed.

Sisyphus Jones
Sisyphus Jones
6 days ago
Reply to  michael harris

They make the best espresso in the state of Tennessee. How’s that for an endorsement?

UnHerd Reader
UnHerd Reader
3 days ago
Reply to  Sisyphus Jones

Not much of an endorsement fir Tennessee.

J S
J S
7 days ago

First get the homeless out of the bathrooms. Then worry about Gaza and pride.

Lancashire Lad
Lancashire Lad
7 days ago

Describing a decrease in sales for a coffee company as “distressing” is in itself a signifier of the emotional nonsense emanating from the media; including, in this instance, Unherd.
This, following on a reported $100m donation to the BLM campaign, is about as distressing as dropping a penny or a dime through a crack in the pavement/sidewalk.

Last edited 7 days ago by Lancashire Lad
Kevin Hansen
Kevin Hansen
7 days ago
Reply to  Lancashire Lad

$100M to BLM. Imagine how many houses you could buy with that.

Paul T
Paul T
7 days ago
Reply to  Kevin Hansen

For McMansions at $8m to $12m you could buy between 8 and 12.

Warren Trees
Warren Trees
6 days ago
Reply to  Paul T

Like the ones purchased by the founders.

ChilblainEdwardOlmos
ChilblainEdwardOlmos
7 days ago

You do realize that the primary issue may be “it’s the economy, stupid”. It’s pretty clear from down here in the cheap seats that luxuries like expensive takeout coffee is one of the first cuts people make when struggling financially. It can be made at home for a tiny fraction of going to a coffee shop. Seems obvious.

Thomas Wagner
Thomas Wagner
3 days ago

You don’t go to a coffee house for the coffee, but for the ambiance. When the ambience turns hostile, the coffee isn’t going to make up for it.

laurence scaduto
laurence scaduto
2 days ago
Reply to  Thomas Wagner

I like the mermaid. She’s got all the ambiance I need!

Red Reynard
Red Reynard
7 days ago

Starbucks! Nope. Never.
When a company actively persues robust tax avoidance (I accept, not illegal tax evasion) techniques, it receives no money from me – regardless of its political stance.
I explain my position to any who will listen, and have successfully convinced many to follow the Tax Avoidance Boycott.

Eddie Swales
Eddie Swales
3 days ago
Reply to  Red Reynard

Funny how big tax avoiding companies are often the ones who virtue signal the loudest. It’s almost as if the two things are linked…

UnHerd Reader
UnHerd Reader
2 days ago
Reply to  Eddie Swales

Apple is another example.

blue 0
blue 0
6 days ago

All politics aside, In reality Starbucks is no longer a coffee company but an obesity inducing milkshake company.

Matt Sylvestre
Matt Sylvestre
7 days ago

Stay a-political, it’s the only way – Idiots.

UnHerd Reader
UnHerd Reader
7 days ago

Their coffee is mediocre. Try brewing a better cup, and maybe they’ll get new loyal customers.

Andrew R
Andrew R
7 days ago

American Psycho: “Let’s see Paul Allen’s card”

https://youtu.be/AQmmO95thxI?si=tuAi6DXcGlJP7bfb

Seb Dakin
Seb Dakin
7 days ago
Reply to  Andrew R

Brilliant- thanks for the link!

UnHerd Reader
UnHerd Reader
7 days ago
Reply to  Andrew R

Thanks for the belly laugh!

UnHerd Reader
UnHerd Reader
3 days ago
Reply to  Andrew R

Thanks!

william langdale
william langdale
6 days ago

Groundhog Day again.Lets sign up for the Omnicause,what could go wrong.It beggars belief and I can only think that the bosses of these companies are cowards or just thick.”We’re so ethical,on the right side of history blah blah blah”.Have any of them asked what their customers actually want,surely a good idea for any business? Maybe someone could point out to them that your ethics are what you do when you think no one’s looking,not some vacuous display of submission to regressive left group think.

UnHerd Reader
UnHerd Reader
3 days ago

I like that expression “omnicause”.

Liakoura
Liakoura
7 days ago

Other than to use their toilets, I’ve only been in Starbucks once and that was to meet a potential client in China. He chose the venue. In Mainland China Starbucks ‘currently operate more than 6,500+ stores in over 250 cities, employing more than 60,000 partners’.
However for me the conundrum is why people are getting hot under the collar about Black Lives Matter and similar worthy causes while China’s much hated and despised bureaucracy seems to be ignored.
Today’s news is that four American academics on an exchange visit were reportedly stabbed in Chinese public park. There’s also the announcement that Chinese President Xi Jinping has unveiled a plan to invite 50,000 young Americans to China in the next five years. At the same time Chinese diplomats say a travel advisory by the U.S. State Department has discouraged Americans from going to China.
So might this just give Starbucks’ customers even more reasons to boycott the company?

Jerry Carroll
Jerry Carroll
6 days ago

Starbuck coffee tastes burnt. There isn’t a single independent neighborhood coffee shop that doesn’t have a better product.

Sisyphus Jones
Sisyphus Jones
6 days ago
Reply to  Jerry Carroll

I tend to judge a coffee shop by its Americano. Starbucks’ is the best. By far. Most of the independent neighborhood coffee shops, in Nashville anyway, are grotesque hipster hell-holes with decent coffee and mediocre espresso. If you can’t identify a good espresso bean, you shouldn’t open a coffee shop.

James P
James P
2 days ago
Reply to  Jerry Carroll

Funny, my late great Aunt used to call it “Starburn”.

Chauncey Gardiner
Chauncey Gardiner
7 days ago

Perhaps plain-old cost-push price increases could explain much of the action?
There are, for example, a lot of recent pieces out there about how employment in fast-food has dropped precipitously in California as vendors adapt to the imposition of $20/hour minimum wage requirements. Workers got their wage increases–and the first wave of mass layoffs ensued. At the same time, vendors raised prices, and folks are deciding that a Big Mac is not worth $20. Sales are down.
Now, that’s just California, but the idea that consumers now perceive fast-food as something of a luxury–that meme is floating around. Stuff like that could explain a decline in sales. We would need to control for it in our analysis.

Graham Stull
Graham Stull
6 days ago

“Far better to leave politics to the citizens of our free society, and focus on selling coffee.”
I agree. And far better again, I say, to sell good coffee – unlike the bitter, horrid stuff Starbucks pushes.
Long before their obnoxious politics, I have avoided the brand because their core product sucks. Yet I appear to be in the minority: their swill has now taken over the British motorway network to such an extent that I have been reduced to a handful of Costa rest stops, and may soon even have to endure the indignity of the British rail ‘services’, where at least passable coffee is obtainable at the stations.

Claire Matthews
Claire Matthews
6 days ago

They lost me when they took away the condiment bar. It started during Covid and they never went back. I could care less about their politics, I just want to put my own half and half in my coffee! I am sure the employees get annoyed as hell too, having to put just the right amount of whatever into people’s drinks.

Last edited 6 days ago by Claire Matthews
Chipoko
Chipoko
5 days ago

I hope Starbucks sinks. Just another company taken over by Woking Class managerialism. A bloated corporate whose arrogance leads it to believe it is leading social change. I’ll never again enter another of its premises or consume any of its food or drink (the coffee’s not that great anyway!). Just like I never use Gillette or Budweiser products – etc., etc.

Jae
Jae
2 days ago

I hate Starbucks politics, but their coffee is awful too. Bitter and oily.

Dougie Undersub
Dougie Undersub
6 days ago

So I guess these lyrics will have to change.
https://youtu.be/av5Bj-YqcSc?feature=shared

William Brand
William Brand
6 days ago

Starbucks has a lesson for Ed Musk. The customers for electric cars are WOKE Democrats with high elite incomes and Musk has revealed himself to be a “constipated” South African Boer with MAGA opinions. His opinions on X have offended his customers and these have started looking at other makes of electric cars. Red state car buyers tend toward gasolene engines and are less likely to choose electric. They are also too poor and working class to afford a Tesla even if they want one. Musk must produce a car that working class people can afford. Copy the Chinese BYD Seagul and sell to the working class who own homes. Add a hybrid unit as well. Renters are unable to buy since Landlords do not provide chargers at rental units.

Studio Largo
Studio Largo
6 days ago
Reply to  William Brand

Or recognize that driving an electric car is just another empty, narcissistic virtue signaling move by cosseted ‘progressives’. Don’t believe it? Look at the environmental costs of creating those lithium batteries. Also, the power to charge said batteries has to come from somewhere and it ain’t from solar panels and wind farms. Car companies are losing millions thanks to mindless EV mandates, and it’s easy to see why.

Kat L
Kat L
1 day ago
Reply to  Studio Largo

Yes far better to increase the efficiency of gas powered engines. Also start selling base models without all the silly gadgets which ratchet up the costs.