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Backlash Against Starbucks Over Refugee Jobs Is Having A Big Impact

'Sell products, not politics!'

10/03/2017 11:51 GMT
Leonhard Foeger / Reuters
Falling footfall to Starbucks stores has coincided with a boycott

Starbucks risks plummeting sales after a widespread boycott over its pledge to hire refugee workers begins to take effect, a new survey has suggested.

The American coffee chain announced in January it would hire 10,000 refugees across the world in response to Donald Trump’s travel ban affecting many majority Muslim nations.

But a recent survey of consumers in the US has revealed people feel less positive about the Starbucks brand than they did before the announcement.

Analysts have said the chain may suffer falling sales as a result.

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The boycott of the chain, which carries the hashtag #BoycottStarbucks on Twitter, has been enthusiastically adopted by supporters of the new US president.

Many welcomed news of Starbucks’ woes. 

YouGov’s BrandIndex survey found that people are both less favourable towards Starbucks and say they’re less likely to spend money there.

Starbucks’ consumer perception levels took an immediate hit as measured by YouGov BrandIndex’s Buzz score, falling by two-thirds between 29 Jan and 13 Feb, and have not recovered.

Starbucks’ “Buzz” score fell to 4 from 12 during that time. Such scores can range from 100 to -100 and are compiled by subtracting negative feedback from positive. A zero score means equal positive and negative feedback. 

Mohammad Khursheed / Reuters
Starbucks’ consumer perception levels took an immediate hit as measured by YouGov BrandIndex’s Buzz score

Prior to Schultz’s refugee comments, 30 percent of consumers said they would consider buying from Starbucks the next time they made a coffee purchase, that fell to a low of 24 percent and now stands at 26 percent, according to a YouGov spokesman.

“Consumer perception dropped almost immediately,” said YouGov BrandIndex CEO Ted Marzilli, who added that the statistically significant drop in purchase consideration data showed that consumers became less keen to buy from Starbucks.

“That would indicate the announcement has had a negative impact on Starbucks, and might indicate a negative impact on sales in the near term,” he said.

Financial firm Credit Swiss put a hold rating on Starbucks stock and said the refugee pledge could lower sales in the near term, CNBC reported.

Last year, the revelation that a special edition Starbucks cup would be green has led some people to suggest the global coffee chain is promoting Islam.

Representatives from Starbucks declined to comment on the surveys and the boycott’s impact on sales, Reuters reported.

The consumer sentiment data comes at a sensitive time for Starbucks, which reported a fall in foot traffic the last quarter.

Starbucks executives pinned much of the blame for its traffic setback on a pileup of mobile orders, which caused bottlenecks at drink pickup stations that thwarted walk-in customers, rather than the boycott.