What’s the cost when business gets political?

Increasing trend seems not to be hurting profits

At a time when politics is dividing Americans across the dinner table and at the water cooler, businesses are increasingly picking sides and it doesn’t appear to be hurting the bottom line. In fact, it may be helping.

Corporate behemoths, like fastfood chain Chick-fil-A, and small mom-and-pops, such as The Red Hen, the Lexington, Virginia, restaurant, that booted President Donald Trump’s press secretary Sarah Huckabee Sanders on Friday, are drawing clear lines about where they stand on public policy and national issues.

Shunning someone due to political beliefs or activities isn’t necessarily considered discrimination, according to U.S. law. And for companies looking to take a stance, the Red State versus Blue State divide can be an opportunity to earn some cold, hard green.

It’s “reputational capital they can build with their customers,” said George Washington University management professor James Bailey. “They know who buys their shoes or buys at this restaurant. What they’re doing is building loyalty with those customers.”

Customers who share the same values or politics as outspoken businesses are more likely to patronize them. Even companies whose stances might be seen as out-of-step know how the people who spend money there will react. Bailey said, for example, that many Chick-fil-A restaurants are in places as opposed to gay marriage as the company is.

The list of businesses making their politics public grows longer all the time: Outdoor-apparel retailer Patagonia criticized Trump’s decision to make two national parks much smaller and caught flak, as did the spice company Penzey’s after the CEO accused him of being a racist. The craft-store chain Hobby Lobby sought a religious exemption to avoid covering birth control under Obamacare. General Mills’ depiction of an interracial family in a Cheerios commercial and Subaru’s longtime embrace of the lesbian, gay, bisexual, transgender and queer community have drawn plenty of criticism, and support, too.

AP Passersby examine the menu at the Red Hen Restaurant on Saturday.