In the wake of the Gaza genocide, Starbucks Corporation finds itself in the midst of a significant financial crisis, having incurred an $11 billion loss as a result of a global boycott stemming from supporting Israel.
The coffee giant, headquartered in Seattle, has seen its shares plummet by 9.4%, wiping out approximately 11 billion dollars in value. Meanwhile, the ongoing conflict in Gaza intensifies, with over 18,000 Palestinians losing their lives in the Israeli bombardment.
Over the course of 19 calendar days following its November 16 Red Cup Day promotion, Starbucks shares experienced a sharp decline of 8.96%, translating to the aforementioned substantial loss. Analysts attribute this downturn to reports of sluggish sales and a muted response to the holiday season’s offerings.
The origins of the boycott against the Seattle, Washington-based coffee chain are rooted in complex geopolitical issues. Starbucks Workers United, the union representing many baristas, ignited controversy with a tweet expressing solidarity with Palestinians. This led to a sustained boycott, particularly in response to the Israeli occupation’s actions in the Gaza strip.
The ramifications of this boycott pose a formidable challenge for Starbucks, with its stocks witnessing a continuous decline over 12 consecutive stock market sessions—the lengthiest streak recorded since the company went public in 1992. Currently valued at around $95.80 per share, Starbucks stocks have descended from their yearly high of $115.
While the company denies any wrongdoing, it confronts the daunting task of preserving its brand reputation amid the backdrop of divisive global issues. Starbucks CEO Laxman Narasimhan, in a recent discussion with analysts, expressed optimism about the company’s resilience through diversified channels and its ability to engage customers, even in the face of macroeconomic challenges and shifting consumer behaviors.
Notably, the broader boycott of Starbucks aligns with a larger movement targeting several global brands over their perceived support of Israel. In Egypt, Starbucks reportedly laid off workers in late November due to the financial repercussions of the boycott, necessitating cost-cutting measures.
