6/12/2023–|Last updated: 12/6/202311:16 PM (Mecca time)
Starbucks incurred losses estimated at $11 billion amid boycott campaigns against the backdrop of Israel’s war on Gaza, as well as the impact of employee strikes. Weak promotional activity.
The American magazine “Newsweek” said that the recent weeks were full of turmoil for Starbucks, as boycott campaigns, employee strikes demanding improvement in the work environment and wages, and weak demand for promotional offers led to a decline in the company’s market value by $10.98 billion.
The magazine quoted an analyst in the café sector as saying that while the conflicts appear to be multifaceted for the Starbucks chain, these unfavorable negative effects on the company’s plans indicate challenges regarding its future.
The magazine explained that the stock market had a severe impact on “Starbucks” at a time when the company was facing complex societal issues, which forced investors to withdraw from owning the company’s shares, and pushed its shares to the longest series of losses since its first offering on the financial markets in 1992.
The report indicated that since last November 16, Starbucks shares have declined by 8.96%, which equates to a loss of approximately $11 billion, amid reports of slowing sales and weak response to holiday season offers.
The magazine confirmed that Starbucks found itself in trouble after a tweet from the group’s workers’ union expressing its solidarity with the Palestinians. The magazine noted that the company’s actions against the union and its prosecution extended to its commercial activity.
For its part, Bloomberg reported that Starbucks shares fell by about 11% from the level of $107.21 on November 16 to $95.54 at the end of trading on December 5.
Thus, the stock has erased 9.5% of its value in total since the 16th of last month, or approximately $12 billion, according to Bloomberg.
The company’s market capitalization has lost $11.3 billion since November 16, when it reached a total of $123.22 billion, compared to $111.94 billion currently.
According to Bloomberg, the data did not hide a slowdown in the global coffee company’s sales last month after growing 8% in its fourth fiscal quarter, according to JP Morgan analyst John Evanko.
Starbucks’ lawsuit against the union led to a campaign against it on social media and prompted a number of the company’s workers who are members of the union to launch protests against it in more than 200 branches in the United States, which led to disturbances in the normal functioning of the company’s branches.
Starbucks faces the challenge of maintaining its brand reputation in light of these influences.
And in the morning Starbucks filed a lawsuit against its employees’ union, accusing them of supporting Palestine Campaigns have escalated on social media platforms calling for a boycott of the famous American café chain in the Arab world.
The chain has more than 35,000 branches around the world in 86 countries, including more than 9,000 branches in the United States of America alone, so its employees established a union that represents them before the company’s management.
