Starbucks scalded by bias
A bitter, costly lesson
Too little, too latte. The Starbucks racial bias backlash may eventually be among the most expensive in the history of the fast-food industry.
The Seattle-based coffee chain is swiftly reacting to the stinging public blowback that followed the controversial April 12 arrests of two innocent black businessmen at a Philadelphia Starbucks. And its plan of action could cost millions of dollars, according to analysts.
The chain intends to close its more than 8,000 company-owned stores nationwide on May 29 for anti-racial bias classroom instruction for its 175,000 employees.
And Starbucks may not be alone in having to close stores for expensive employee racial bias training programs to calm the public mood. Calls for the entire industry to have a do-over are predicted.
“Of course, there is going to be a boomerang effect,” said Hughey Newsome, an AfricanAmerican conservative activist who sees other chains being ensnared by the same overhead costs as Starbucks. “That’s usually what happens — other activists out there are going to expect other major chains to do something proactively, like Starbucks.
“I think it is overkill, closing Starbucks stores for an afternoon of training,” Newsome, chief financial officer for the City of Flint, Mich., told The Post.
“If I am a shareholder, and an African-American, white, Asian, or of whatever background, I am going to be furious at Starbucks.”
Industry bean counters say it’ll take plenty of coffee sales to offset Starbucks’ lost revenue on May 29 as baristas take notes.
Estimates of the losses for the chain range from $6 million to as high as $30 million in missed sales during the closure period alone. That higher figure is based on average sales of $3,750 a day at each location, as calculated by someone who closely watches the industry.
“We cannot confirm that number,” a spokesperson for Star- bucks responded to The Post.
Starbucks may not have to worry too long about losing market share. McDonald’s and other fast-food chains may be the next targets for racial bias campaigners, according to Newsome and others.
Starbucks Chief Executive Officer Kevin Johnson has also apologized, calling the Philadelphia incident “reprehensible” and the action of the employees “not representative of our Starbucks mission and values.”
Meanwhile, according to tracker YouGov BrandIndex, Starbucks has slumped to its lowest “consumer perception” measure since November 2015 — the last time it faced a major public relations crisis.
“In November 2015, Starbucks received backlash when it replaced its annual Christmas ‘symbols of the season’ cup design with a simple two-tone red cup,” according to YouGov BrandIndex. “The current drop is about at the same rate as the one in November 2015.”
Ted Marzilli, chief executive at YouGov, said some customers may have been tempted to skip their regular Starbucks cup last week in protest.
McDonald’s did not respond to requests for comment.