Global political tensions are spilling fast into Seattle-based Starbucks Corporation, as the company has lost approximately 11 billion dollars in value, erasing 9.4 per cent of the company's total value. Within a span of 19 calendar-days, since its November 16 Red Cup Day promotion, shares of Starbucks have plummeted 8.96 per cent, which equates to a nearly USD11 billion loss, amid analysts' reports of slowing sales and a subdued response to the holiday season's offerings.
The boycotts at the Seattle, Washington-based chain have deep roots, touching on sensitive geopolitical issues after the company found itself in hot water following a tweet from Starbucks Workers United, the union representing many of its baristas, expressing solidarity with Palestinians.
"Amid an ongoing boycott due to the Israeli occupation's aggression against the Gaza strip, the undercurrent of discontent signals a challenging brew for the company's future," an industry analyst said.
Starbucks stocks declined for 12 consecutive stock market sessions, the longest-ever recorded streak since the company went public in 1992, and the stock currently hovers at around USD95.80 per share, down from its yearly high of USD115.
The company has denied wrongdoing in the scenarios but faces the challenge of maintaining its brand reputation amid divisive global issues.
In a recent call with analysts, Starbucks CEO Laxman Narasimhan said he remains optimistic about the company's diversified channels and ability to engage customers despite macroeconomic challenges and changing consumer behaviours.
The recent boycott of Starbucks comes in part of a large boycott of several global brands over their support of Israel. Starbucks in Egypt reportedly laid off workers in late November after being financially affected by the boycott - forcing it to cut expenses.
FAQs
Within a span of 19 calendar-days, since its November 16 Red Cup Day promotion, shares of Starbucks have plummeted 8.96 per cent, which equates to a nearly USD11 billion loss, amid analysts' reports of slowing sales and a subdued response to the holiday season's offerings.
How much money has Starbucks lost because of the boycott? ›
Boycotting works: Starbucks loses $11bln in market value
However, since the announcement of the promotion in mid-November, Starbucks saw a decline of 8.96 percent in its shares, which equals $10.98 billion in losses, the lowest it has ever experienced since 1992.
Why did Starbucks lose $12 billion? ›
The rout erased 9.4% of Starbucks' market value, a decline of nearly $12 billion. Over the past month, Starbucks' market cap has plunged some $12 billion after a walkout on its all-important Red Cup Day and a public spat over the Israel-Hamas war with the union representing its baristas.
Has Starbucks been affected by boycotts? ›
Ultimately, it's evident that Starbucks felt the impact of the boycott, as evidenced by share price decline since mid-November, falling by about 9 percent, resulting in a market cap reduction of around $11 billion although it's important to note that other factors may have contributed to this decline.
Is Starbucks in trouble financially? ›
Starbucks continues to reign as one of the world's largest and most profitable restaurant chains. But despite holding that highly-coveted title, the coffee giant is facing its fair share of financial struggles in 2024.
What was the unethical scandal with Starbucks? ›
Starbucks sued for allegedly using coffee from farms with rights abuses while touting its 'ethical' sourcing. The lawsuit calls for the coffee chain to end its “unfair and deceptive” trade practices and argues that the company is aware of the child and forced labor on some of its supplier farms.
Why Starbucks faces over $11 billion loss in value? ›
Starbucks faces $11 billion value loss due to poor sales, boycotts amid global political tensions.
Has McDonald's lost money due to boycott? ›
McDonald's is one of many Western franchises that is being targeted by a boycott campaign over their support for the Israeli Occupation Forces (IOF). Mar. 15, 2024 8:51 p.m.
Does Starbucks actually support Israel? ›
Since the Israel-Hamas war began, Starbucks has been forced to deflect perceptions that the company has supported and even funded the Israeli government and the Israeli military. It issued a lengthy statement in October describing the claims as false, but that has not cooled the calls for boycotts in numerous regions.
Why did Starbucks get in trouble? ›
Boycotts over tensions in the Middle East
Starbucks Workers United countersued Starbucks, asking a federal court in Pennsylvania to rule that it can continue using its name and similar logo and saying "Starbucks defamed the union by implying that it supports terrorism and violence."
What percentage of Starbucks (SBUX) stock is held by retail investors? According to the latest TipRanks data, approximately 39.02% of Starbucks (SBUX) stock is held by retail investors. Vanguard owns the most shares of Starbucks (SBUX).
How is Starbucks doing financially in 2024? ›
For fiscal 2024, Starbucks now expects revenue growth in the low single digits, down from its prior forecast of 7% to 10%. The company also revised its projections for global and U.S. same-store sales growth to a range of low single digits to flat from its previous forecast of 4% to 6%.
Which country rejected Starbucks? ›
The Fallen Empire in Australia
But why did Starbucks fail so severely in culturally exporting American Coffee into Australia? It is worthwhile to look at the history of Australian coffee first.
Why is Starbucks losing money? ›
The biggest coffee chain on the planet is losing ground with people around the globe, its first drop in quarterly revenue since 2020 recently showed. The slowdown in store traffic was particularly acute in the U.S., with same-store sales down 3% in the January through March period from a year ago.
How much profit has Starbucks lost? ›
Starbucks reported a 15% drop in net income (to $772 million) compared to this time last year in its quarterly earnings report, with a 2% drop in revenue over the same period, to $8.56 billion—well off the $9.13 billion analysts had predicted.
How much money did Starbucks lose in 2008? ›
In 2008, Starbucks closed to retrain baristas on how to make espresso and steam milk. That closure cost the company $6 million in lost revenue.
Has Starbucks sales dropped? ›
The company reported a 4% decline in same-store sales in the latest quarter, while analysts expected growth.
