Starbucks chief executive officer (CEO) Brian Niccol recently revealed that global boycotts have severely damaged the company’s financial status, particularly following Israel’s military offence in Gaza that began on October 7, 2023.
In an interview with Bloomberg on Sunday, February 16, Brian Niccol described the situation as “really unfortunate,” while admitting that boycotts had caused Starbucks to lose market share, particularly in the Middle East and other Muslim countries including Turkey where sales plummeted due to the consumers’ backlash.
The boycott campaign, which began on October 10 in the Middle East through social media under the Boycott, Divestment and Sanctions (BDS), is a Palestinian-led movement promoting boycotts, divestments, and economic sanctions against Israel.
“The boycott and the whole information cycle. It is really unfortunate because obviously, it hurts the brand, and it hurts our partners in the stores. The thing is that disappointed about it is that it is just not based on anything accurate and true. You know we have never supported any military,” the CEO said in the candid interview.
The American coffeehouse chain which sells coffee, tea, food, and other beverages is one of the world’s largest coffee chains and most recognizable brands. The chain has more than 35,000 branches around the world in 86 countries, including more than 9,000 branches in the United States of America.
Consumers have accused Starbucks and other global companies including PepsiCo, Walt Disney, McDonald, KFC and the OTT platform Netflix of funding Israel for military occupation and operations, resulting in the killing of lakhs of Palestinian civilians including women, elders and children in war-torn Gaza and the West Bank.
However, after the heavy losses, the companies have denied claims that they fund Israel or the Israeli military, and have condemned violence in the region to motivate the consumers.
Starbucks loss
According to the 2023 reports, Starbucks shares have been significantly impacted by the boycott campaign trends. Its shares dropped to USD 91.4 per share on 12 October, 2023 marking the lowest share price since the boycott call began.
According to the reports of the Economic Times, Starbucks lost approximately USD 11 billion in value due to boycotts and poor sales. This represents a 9.4 per cent decline in the company’s value.
Sales in three UT-owned Starbucks-affiliated locations (Littlefield Patio Café, Cypress Bend and Union Coffee) decreased by about 20,000 USD each from September to February 2024.
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