Starbucks Says Hiring Refugees Hasn’t Hurt Its Brand One Bit
Starbucks is disputing claims that the coffee giant’s brand has been tarnished in the wake of a politically charged pledge to hire 10,000 refugees globally over the next five years.
On Friday, Starbucks (SBUX) issued a letter sent by market research firm Kantar Millward Brown that claims that in the wake of the coffee company’s refugee pledge, “we did not observe any substantive impact on customer consideration, future visitation intent or brand Perceptions or any other key performance metrics for the Starbucks brand.” Starbucks—a perennial target of social-media driven ire—found itself the target of a tweetstorm as consumers pledged to boycott the brand as the decision to hire refugees appeared to some to be a political statement. Starbucks made the announcement just after President Donald Trump issued an executive order to bar entry of refugees from several predominantly Muslim countries.
Since then, Wall Street analysts and survey providers have aimed to determine if the most recent boycotts against Starbucks will result in lower sales, even if only in the near term. Starbucks last issued quarterly results in late January and at the time still showed growth in the U.S. market, though that was before the latest boycott. The next results aren’t due until late April.
But Starbucks doesn’t want to let worries linger that the brand’s strength has been diminished. “Over the past week, there has been misinformation widely disseminated in the market about our brand, and stakeholders need the facts,” said Starbucks Chief Strategy Officer Matt Ryan.
The letter it issued by Kantar Millward Brown specifically called into brand-related woes that were called out by a recent YouGov Brand Index Survey, which tracks consumers’ sentiment toward corporations and their willingness to spend money to support those brands. That survey said consumer perception dropped almost immediately after the pledge was made.
“Such backlash or declines are not substantiated in our own measurement of Starbucks brand health and consumer sentiment,” said the letter attributed to Brian James, who is president of Kantar Millward Brown. Starbucks describes the firm as “our long-term partner in providing brand and consumer equity research.”
A number of consumer brands—including Kellogg (K), Under Armour (UAA) and New Balance—have found themselves in the middle of social-media driven boycotts when they’ve taken a stance on politically sensitive topics. For Starbucks, it has been the refugee pledge and even holiday cups that weren’t Christmas enough. Kellogg found itself in a quagmire when it pulled ads from conservative news website Breitbart. President Donald Trump-related comments from top executives at Under Armour, PepsiCo (PEP) and New Balance also generated controversy.
None of those corporations have said the protests led to weaker sales. But that doesn’t mean Wall Street isn’t worried about it. Case in point: Credit Suisse this week said it believed online consumer sentiment data from market researcher NetBase indicated that the announcement to hire refugees had upset some customers and thus could hurt sales. “While net sentiment seems to have recovered, the data has been highly volatile in recent weeks, perhaps indicating some lingering customer fallout,” wrote Credit Suisse.
The firm warned the trends were especially worrying as Starbucks has missed Wall Street’s U.S. same-store sales expectations for four consecutive quarters and sales trends are already problematic for the broader restaurant industry.