Starbucks’ (NASDAQ:SBUX) Brand Takes a Hit on CEO Refugee Comments

Starbucks’ (NASDAQ:SBUX) Brand Takes a Hit on CEO Refugee Comments

Starbucks’ (NASDAQ:SBUX) Brand Takes a Hit on CEO Refugee Comments


Starbucks Corp’s (NYSE:SBUX) vow to hire thousands of refugees after President Donald Trump’s 1st executive order that temporarily banned travel from 7 mostly-Muslim nations appears to be hurting customer sentiment of the coffee chain.

President Trump’s supporters have used Twitter (NYSE:TWTR), Facebook (NASDAQ:FB) and other social media sites to call for a boycott since 29 January, when Starbucks Chief Executive Howard Schultz vowed to hire 10,000 refugees over 5 years from the countries where it does business.

CEO Schultz in a letter to employees said the promise of the American Dream was “being called into question” and that “the civility and human rights we have all taken for granted for so long are under attack.”

YouGov BrandIndex, which tracks consumers’ sentiment toward companies and their willingness to purchase from those brands, noted that the data around this boycott is different because both measures are declining.

Starbucks’ consumer perception levels took an immediate hit as measured by YouGov BrandIndex’s Buzz score, falling by 2/3’d between 29 January and 13 February and have not recovered.

Starbucks Buzz score fell to 4 from 12 during that frame.

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.

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

“Consumer perception dropped almost immediately,” said YouGov BrandIndex CEO, 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.

The boycott supporters are urging like-minded friends to support Starbucks rival Dunkin’ Donuts (NASDAQ:DNKN).

Starbucks declined to comment on the surveys and the boycott’s impact on sales.

Symbol Last Trade Date Change Open High Low Volume
NASDAQ:SBUX 54.53 10 March 2017 -0.66 55.39 55.4 54.42 13,886,400
HeffX-LTN Analysis for SBUX: Overall Short Intermediate Long
Bearish (-0.32) Bearish (-0.33) Bearish (-0.25) Bearish (-0.39)

I recommend patronizing your locally owned and operated coffee shop.

Have a terrific week.

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