Starbucks’ brand suffers following politically-infused announcement

There’s no such thing as bad publicity. Or is there?

In January, following U.S. President Donald Trump’s temporary immigration ban, Starbucks announced that it would hire 10,000 refugees over the next five years.

The announcement was seen as a rebuke of Trump’s immigration policy by one of the highest profile brands in the world and to nobody’s surprise, the company’s announcement created a lot of buzz, both positive and negative.

While Starbucks has never shied away from politics – the company, for instance, weighed in on the 2016 election with full-page ads in the New York Times and the Wall Street Journal – it appears that its latest foray into the political arena might have backfired.

According to YouGov’s BrandIndex, which polls consumers about brands and “track[s] the fundamentals of brand health every single day,” Starbucks’ consumer perception levels have dropped by a whopping two-thirds since the company announced its plans to hire 10,000 refugees.

As detailed by YouGov’s Ted Marzilli:

…two days before Starbucks’ announcement, 30% of consumers said they’d consider buying from Starbucks the next time they wanted to buy coffee, the highest it’s been since last March. The percentage is now down to 24%, matching last August’s levels.

While it can be difficult to determine cause and effect, the rapid change around the time of Starbucks’ announcement seems to suggest that the announcement is indeed the culprit. Following the announcement, calls for a boycott against Starbucks gained steam, and the #BoycottStarbucks hashtag trended on Twitter.

Unconventional wisdom

The conventional wisdom is that boycotts rarely have a meaningful impact on brands, but might it be time for brands to consider that the conventional wisdom no longer holds true?

Despite the size of the #BoycottStarbucks campaign, Barron’s Emily Bary suggested that,

“The movement by Donald Trump’s supporters to stop going to Starbucks may be the biggest boycott of a public company in years, social media data show. But news of the boycott seems to be energizing Starbucks’ defenders, too.”

And Marketwatch’s Tony Garcia wrote: “Social media mobilizes corporate boycotts quickly, but brand advocates will come to the defense of companies they care about.”

But past isn’t guaranteed to be prologue, and the YouGov data suggests that Starbucks’ decision to inject itself into the immigration debate with a bold announcement might not have been well-advised, especially considering that Starbucks has recently struggled to meet same-store sales growth targets.

While nobody can predict the long-term effects of such announcements, and the ensuing boycotts, it appears clear that Starbucks had very little to gain from getting political.

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