Starbucks has seen nearly $12 billion erased from its market value during the past month as sales reportedly have slowed amid tighter consumer wallets and growing labor strife — with some even speculating the chain has been hit by boycotts over the Israel-Gaza war. The response was interpreted as a display of support for Israel over Palestine, prompting calls for a boycott. Despite Starbucks’ efforts to quell boycott calls, the hashtag #boycottstarbucks is still trending on social media. According to TikTok’s Creative Center, a database that details user insights, the hashtag has been used in some 16,000 times over the past 30 days, generating a combined 167 million views. On X, other social media users appear to be cheering Starbucks’ decline. “I haven’t gone to Starbucks in months due to the boycotts and I am so happy to see less people there too,” a user who goes by Kate wrote. “WE WON,” another chimed in while a slew of commenters said the slash in market cap was “deserved.”
Quick Read
- Decline in Market Value: Starbucks has experienced a significant decrease in market value, losing nearly $12 billion over the past month.
- Sales Slowdown: The company is reportedly facing a slowdown in sales due to tighter consumer spending and growing labor disputes. There are also speculations of boycotts related to the Israel-Gaza war impacting sales.
- Investor Concerns: Investors are worried that consumers might reduce spending on luxury items like Starbucks’ coffee during the holiday season, especially with tighter budgets.
- Sales Data Analysis: Bloomberg, citing JPMorgan analysts, reported a “material slowing” in Starbucks’ sales in November, despite an 8% sales growth in the fiscal fourth quarter which was higher than expected.
- Stock Price Decline: Starbucks’ stock price fell 1.6% when the markets opened on Monday, marking an 11th consecutive session of decline. This is the longest losing streak for the company since its public debut in 1992.
- Impact on Market Value: The recent decline in stock price has resulted in a 9.4% drop in Starbucks’ market value.
- Share Price Decline: Starbucks’ share price dropped approximately 6.5% to $96.90 over the past month as of early trading hours on Monday.
- Red Cup Day and Worker Walkout: The decline coincided with Starbucks’ annual Red Cup Day. This promotional event was overshadowed by a walkout from hundreds of unionized workers, demanding better staffing and schedules. This created challenges for non-unionized staff on a busy day.
- Union Disagreements: Starbucks has been in conflict with the Workers United union, particularly following a controversial social media post by the union expressing solidarity with Palestine amidst violence in the region.
- Starbucks’ Response to Union’s Post: After the union’s post, Starbucks distanced itself from the organization, condemning acts of terrorism, hate, and violence. The company stated that the union’s words and actions are their own.
- Boycott Movements: The situation led to calls for a boycott against Starbucks, with the hashtag #boycottstarbucks trending on social media. The TikTok Creative Center reported the hashtag being used 16,000 times in 30 days, amassing 167 million views.
- Public Reaction: Social media users have expressed various reactions, with some supporting the boycott and others commenting on Starbucks’ market value decline.
- Starbucks’ Official Statement: When asked for comment, Starbucks reiterated its condemnation of hate, terrorism, and violence, expressing sympathy for those affected in Israel and Gaza.
- Sales Growth Despite Challenges: Despite the decline in total value, Starbucks reported an 8% rise in store sales globally for its fiscal year ending in November 2023.
- Wage Increase for Workers: Starbucks announced a minimum 3% wage increase for U.S. retail workers from 2024, following union pleas. However, the Workers United union criticized the increase as insufficient.
- Union Organizer’s Controversial Support: Jaz Brisack, a founding organizer of the union, previously expressed support for Palestinian Rasmea Odeh, involved in bombings in Jerusalem during 1969 and 1970.
Reuters has the story:
Starbucks lost nearly $12 billion amid boycotts due to its support to Israel
Newslooks- Reuters
Starbucks has seen nearly $12 billion erased from its market value during the past month as sales reportedly have slowed amid tighter consumer wallets and growing labor strife — with some even speculating the chain has been hit by boycotts over the Israel-Gaza war.
Investors have grown wary that consumers will splash out on a pricey cup of joe during the holiday season when budgets get tighter, according to Bloomberg, citing sales data from JPMorgan analysts that signaled a “material slowing” at Starbucks in November.
Despite delivering better-than-expected sales growth of 8% in its fiscal fourth quarter, the coffeehouse’s share price has decelerated on a week-over-week basis, following trends in the snack and coffee industry.
When the markets opened on Monday, Starbucks’ stock dropped 1.6%, declining for a 11th consecutive session in what is the longest losing streak since Starbucks’ public debut in 1992.
The rout erased 9.4% of Starbucks’ market value, a decline of nearly $12 billion.
As of early trading hours Monday, the Seattle-based company’s share price was down roughly 6.5%, to $96.90, on a monthly basis.
When the coffeehouse chain’s share price started to decline, it was putting on its annual Red Cup Day.
The promotional event saw baristas handing out free red-colored, reusable, holiday-themed cups to customers on their coffee purchases on Nov. 16, though the festivities were overshadowed by a walkout.
Hundreds of workers represented by the Workers United union walked off the job on the notoriously busy day — demanding improved staffing and schedules — while non-unionized staffers endured one of the “most infamously hard, understaffed days,” as drink orders pile up and employees end up on the receiving end of abuse from frustrated customers over long wait times.
The protest was just the latest in Starbucks’ deep-rooted disagreements with the union.
Last month, the two entities filed warring lawsuits over the union’s social media post declaring “Solidarity with Palestine!” in the wake of Hamas’ deadly attacks.
After Workers United published the controversial statement in a since-deleted post on X last month — where it boasts nearly 100,000 followers — Starbucks swiftly moved to distance itself from the organization.
“We unequivocally condemn acts of terrorism, hate and violence, and disagree with the statements and views expressed by Workers United and its members. Workers United’s words and actions belong to them, and them alone,” Starbucks said at the time.
The response was interpreted as a display of support for Israel over Palestine, prompting calls for a boycott. Despite Starbucks’ efforts to quell boycott calls, the hashtag #boycottstarbucks is still trending on social media.
According to TikTok’s Creative Center, a database that details user insights, the hashtag has been used in some 16,000 times over the past 30 days, generating a combined 167 million views.
On X, other social media users appear to be cheering Starbucks’ decline.
“I haven’t gone to Starbucks in months due to the boycotts and I am so happy to see less people there too,” a user who goes by Kate wrote.
“WE WON,” another chimed in while a slew of commenters said the slash in market cap was “deserved.”
When The Post reached out to Starbucks for comment, a company spokesperson pointed to a message from its chief partner officer, Sara Kelly, posted on Starbucks’ website last month.
“Starbucks unequivocally condemns acts of hate, terrorism and violence,” Kelly wrote. “As a leadership team, we want to again express our deepest sympathy for those who have been killed, wounded, displaced and impacted following the heinous acts of terror, escalating violence and hate against the innocent in Israel and Gaza.”
Though Starbucks’ total value was down, its store sales at its 35,000-plus locations worldwide rose 8% for its 2023 fiscal year that ended in November.
Earlier this month, Starbucks said it would raise hourly pay for its US retail workers by at least 3% from 2024 after Workers United’s repeated pleas to give baristas an increased hourly base wage.
Staffers affiliated with Workers United — which represents Starbucks staffers at 340 Starbucks locations across the US — criticized the increase, calling it “tone deaf” given Starbucks’ recently-reported increases in revenue and the recent wage hikes won by auto workers.
Meanwhile, one of union’s founding organizers, Jaz Brisack, has previously voiced support for Palestinian terrorist Rasmea Odeh, who was involved in bombings in Jerusalem in 1969 and 1970.
