Starbucks Faces Loss of $11 Billion in 3 Weeks Amid Boycotts

Since November 16, Starbucks Corporation has experienced a notable downturn, witnessing a substantial decrease in market value amounting to approximately $10.98 billion. This sharp decline is linked to a series of boycotts and employee strikes that have unfolded over recent weeks.

The company’s challenges were exacerbated by a tepid response to its holiday promotions, particularly the Red Cup Day event. Despite offering a free reusable holiday cup with each purchase, this promotion failed to generate the expected customer interest.

Since its announcement in mid-November, Starbucks’ shares have fallen by 8.96%, marking the most significant market value decrease for the company since 1992.

The boycotts against Starbucks are part of a global movement to disengage from brands economically supporting Israel.

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This movement gained momentum due to the company’s perceived stance on the Israel-Palestine conflict. Tensions escalated when Starbucks filed a lawsuit against its employee union over a post expressing solidarity with Palestine, made in response to the Israeli military operation in Gaza.

The post was subsequently removed, with the union claiming it was unauthorized by its leaders.

In response to this legal action, Starbucks employees seized the opportunity to demand better working conditions, including improved scheduling and the freedom to negotiate contracts. This resulted in a series of consistent employee strikes, further impacting the company’s operations and reputation.

Despite these challenges, Starbucks CEO Laxman Narasimhan remains optimistic about the company’s ability to recover from these “macroeconomic challenges.” However, current statistics present a different picture.

For instance, last year’s Red Cup Day saw an 81% increase in consumption, compared to only a 31.7% increase this year.

The recent events at Starbucks underscore the intricate interplay between corporate policies, employee rights, and geopolitical issues, highlighting how these factors can significantly influence a company’s market standing and public perception.