American coffee giant Starbucks continues to grapple with significant stock losses that have persisted since November 16, through to last Friday's session, amid a mix of influences. These include a widespread consumer boycott following Israel's conflict with Gaza, employee strikes, and a lackluster response to promotional campaigns.
Persistent Decline
Starbucks' stock closed last Friday at $96.75, marking a 1.1% daily drop. This session marks the 16th loss for the company, interrupted by only four 'green' sessions in which the American coffee chain caught its breath, according to data tracked by Al Jazeera Net.
On a monthly basis, Starbucks' stock has plummeted by 9.7% since the session on November 16, when it stood at $107.21 before a steep descent to near $96.8.
This drop signifies a loss exceeding $12 billion in market capital for the company, which fell from $123.2 billion a month ago to $111.2 billion at the close of last Friday's session.
Mustafa Fahmy, the CEO of Strategy and Emerging Markets at Fortress Investment Group, stated that Starbucks, facing a broad boycott campaign, had failed to change consumers' perception despite promotional offers, as customers now see the company as supportive of the occupation.
Fahmy further added in his dialogue with Al Jazeera Net that Starbucks will face numerous challenges in the future and anticipated very poor financial results for the fourth quarter, which will reflect adversely on the company's annual financial performance.
Starbucks is also confronting the challenge of maintaining its brand reputation amid these influences.
Struggles with Workers
After a tweet from the union of Starbucks' employees expressing solidarity with Palestinians, Starbucks filed a lawsuit against their labor union in October. This instigated a wave of strikes among the workers, particularly with accumulated wage-related demands.
This led to an expansion of boycott campaigns against the company, extending to the United States and other areas globally, after initially starting in the Arab and Muslim world due to the company's perceived wide support for Israel at the beginning of the Gaza conflict.
Starbucks boasts more than 35,000 locations worldwide across 86 countries, including over 9,000 branches in the United States and approximately 1,900 cafes in eleven countries across the Middle East and North Africa, employing more than 19,000 people.
The American company seems to be experiencing mounting issues with labor unions. The American labor agency reported its attempts to compel the company to reopen 23 stores believed to have been shut down last year to undermine a national union campaign, in the latest case accusing the coffee chain of unlawful labor practices.
According to Reuters, a complaint by a regional director at the National Labor Relations Board (NLRB) last Wednesday stated that 8 of the American stores had already expressed solidarity with the unions when the branches were closed.
Workers at more than 360 Starbucks branches in the U.S. have voted to join unions since 2021, and the company is contending with over 100 labor complaints at the NLRB.
Starbucks, on its part, denies any wrongdoing, asserting that it respects workers' rights to unionize.
In a statement last Thursday, Starbucks mentioned that it conducts annual reviews of its stores and routinely makes various changes for valid reasons.
Israel is waging a destructive war on the Gaza Strip, now on its 71st day, following the 'Deluge of Al-Aqsa' operation carried out by Palestinian resistance in Gaza early on Saturday, October 7.
Since the start of this conflict, the Palestinian death toll has risen to 18,787 martyrs and 50,897 injured, with the majority being women and children.
