Analysts: Starbucks' Refugee Hiring Plan Hurt the Brand, Could Impact Sales
Americans love their coffee, but maybe not with a shot of politics.
Financial analysts believe Starbucks' brand and possibly the company's sales have suffered after its CEO announced plans to hire thousands of refugees.
The report from Credit Suisse bank cited a "sudden drop in brand sentiment" after the Jan. 29 announcement by CEO Howard Schultz.
After President Donald Trump's original executive order which banned travel from several Muslim-majority nations, Schultz announced a plan to eventually bring aboard 10,000 refugees.
"We have a long history of hiring young people looking for opportunities and a pathway to a new life around the world," he said, vowing that the company would "welcome and seek opportunities for those fleeing war, violence, persecution and discrimination."
The new analyst report kept a "hold" rating on the company's stock amid the brand's "significant volatility," which the report warned could negatively impact short-term sales at the ubiquitous coffee chain.
A few weeks ago, a survey by the YouGov Brand Index showed the coffee chain's perception was indeed taking a hit.
Starbucks' "buzz" score dropped from 12 to five over a 30 day-span, according to the YouGov data.
Prior to Schultz's announcement, 30 percent of consumers said they'd visit Starbucks for their next coffee run, compared to 24 percent in the ensuing weeks.