Seattle-based Starbucks Corporation grapples with an unprecedented $11 billion loss in market value, reflecting a significant 9.4% decline triggered by a solidarity tweet that sparked widespread global boycotts. The ordeal began when Starbucks Workers United, representing a faction of its baristas, expressed solidarity with Palestinians in a tweet. Since November 16, coinciding with the Red Cup Day promotion, Starbucks shares have plunged by 8.96%, marking the longest consecutive decline in its history.
The fallout from the boycott, coupled with reports of sluggish sales and a lukewarm reception to its holiday lineup, has cast a shadow over the coffee giant’s future prospects. The market downturn has set a new record, with Starbucks experiencing a decline in stocks for 12 consecutive sessions, the longest slump since its inception in 1992. Currently trading at around $95.80 per share, a sharp contrast to its yearly zenith of $115, the company faces a challenging path to recovery.
Despite vehement denials of wrongdoing, Starbucks grapples with navigating through turbulent waters as it seeks to preserve its brand image amidst deeply divisive global issues, particularly those linked to Israeli-Gaza tensions. CEO Laxman Narasimhan, in a recent analyst call, expressed optimism in the company’s diverse outreach channels and its ability to engage customers, acknowledging the macroeconomic challenges and evolving consumer dynamics.
The impact of the boycott extends beyond financial markets, with Starbucks reportedly downsizing its workforce in Egypt due to the strain induced by the ripple effects of the widespread global protests against brands affiliated with Israel. As Starbucks faces this critical juncture, it confronts the formidable task of restoring market confidence and reclaiming its previous stature in the midst of these tumultuous times.