TROUBLE’S BREWING
‘I must be doing something right to garner this much attention’ former CEO said
Starbucks faces a backlash as former CEO Howard Schultz mulls presidential bid,
Just as Starbucks Corp. was turning a corner in its difficult U.S. market, the chain is facing a new worry: Howard Schultz. The man who turned Starbucks from a four-store chain into a global business with more than 28,000 coffee shops has angered many Democrats by saying he might run for president as an independent. It is a prospect that high-profile Democrats including Michael Bloomberg said will only split the vote and help President Trump win re-election in 2020. Some Democrats are calling on Starbucks’s large left-leaning customer base to boycott the chain.
Mr. Schultz doesn’t appear to be backing down. “I must be doing something right to garner this much attention and this much interest,” the former Starbucks CEO told “CBS This Morning” on Tuesday.
This isn’t the first time Mr. Schultz’s politics have resulted in a backlash for the company, although their impact on customer traffic is less clear.
Starbucks angered many customers last spring when it said it would open its bathrooms to everyone, including nonpaying customers. The move followed an April incident in which a Philadelphia store manager called the police on two black men who asked to use the bathroom without buying anything and allegedly refused to leave when asked. Some customers characterized it as a feel-good liberal policy that came at the expense of paying patrons.
Two years ago, the hashtag #BoycottStarbucks was the highest-trending topic on Twitter for an afternoon after Mr. Schultz pledged to hire 10,000 refugees world-wide in response to Mr. Trump’s executive order banning refugees from seven Muslim-majority countries from entering the U.S.
Mr. Schultz in the past has taken a stand on gun control, urged baristas to engage customers in conversations about race relations and publicly criticized lawmakers for being unable to cut the national debt. He said Tuesday on “The View” that he backs abortion rights but played down the importance of the issue, which has long been a litmus-test topic for voters on both sides of the political spectrum.
Even though Mr. Schultz is no longer running Starbucks, the company is inextricably linked with him since he was the brand’s public face and leader for three decades, corporate branding experts say.
Mr. Schultz’s presidential ambitions come at a particularly sensitive time for Starbucks. It has been struggling to attract new and repeat customers to its American shops amid fierce competition in the industry. Traffic was flat in its first fiscal quarter, but that was an improvement from a fall in visits during the final quarter of its past fiscal year.
“He’ll always be associated with Starbucks so unfortunately for Starbucks, they’re going to have a problem,” said Tara Dublin, a Democrat and humor writer in Portland, Ore., who supports Sen. Kamala Harris (D., Calif.) for president in 2020. Ms. Dublin said she would no longer go to Starbucks for her chai if Mr. Schultz runs as an independent. “I don’t know if my not going to Starbucks anymore will hurt the company, but I don’t have to help them.”
Mr. Schultz risks alienating the coffee chain’s core customers. A 2017 survey by Simmons Consumer Research found that self-described liberals were 43% more likely than the average person to have visited a Starbucks in the past month, while conservatives were 16% less likely to have done so. A sizable portion of Starbucks stores are located in or near major cities that tend to have large concentrations of liberal voters.
Robert Reich, a labor secretary under President Bill Clinton, on Tuesday called for a Starbucks boycott if Mr. Schultz runs.
On Monday, Democratic operative Nate Lerner bought the web domain boycott-starbucks.com in hopes of pressuring the company to push Mr. Schultz out of the race. By midday Tuesday, only about 250 people had signed up for an email list on Starbucks boycott activities, Mr. Lerner said, but he said he has plans a broader media rollout if Mr. Schultz enters the race as an independent.
“This is the only tool we have to stop him,” Mr. Lerner said. “I’m sure he’s very close with the board members and biggest shareholders. If this becomes a P.R. nightmare, they’re the ones who can put pressure on him.”
A Starbucks spokesman said the company has successfully navigated past efforts from special interest groups and boycott campaigns and that it plans to stick to its values.
Mr. Schultz didn’t respond to requests for comment on Tuesday. During his appearance on CBS on Tuesday, he sought to paint himself as a centrist. “If Republicans have a choice between a far left, liberal, progressive candidate on the Democratic side, or President Trump, President Trump is gonna get re-elected. If I can get in the race, and I only need 15% to be on the debate stage, I will provide the Republicans with a choice that they do not have.”
His political aide, Bill Burton, said Mr. Schultz is “prepared to defend what was a really incredible time as CEO.”
In 2012, Mr. Burton led Priorities USA, the Democratic super PAC that castigated GOP presidential nominee Mitt Romney as a corporate villain for his role in running investment firm Bain Capital LP.
Today, critics are portraying Mr. Schultz as the villain, not his company. Mr. Burton on Tuesday said he doubted that Starbucks’ corporate history would damage a potential Schultz presidential campaign. “Do you think there are a band of people out there who are angry their name was misspelled on a coffee cup?” he said.
Starbucks CEO Kevin Johnson urged employees to stay focused on customers. “Howard has moved forward to the next chapter of his life, where he has expressed an interest in public service, and potentially public office,” Mr. Johnson wrote in a letter to employees Monday. “Many of us will inevitably be asked if the company supports a possible presidential candidacy of Howard and what changes for Starbucks. As a company, we don’t get involved in national political campaigns. And nothing changes for Starbucks.”
“He’ll always be associated with Starbucks so unfortunately for Starbucks, they’re going to have a problem.” TARA DUBLIN DEMOCRAT AND HUMOR WRITER IN PORTLAND, ORE.