At the Starbucks annual shareholder meeting, one investor, Justin Danhof from the National Center for Public Policy Research, expressed frustration with the company’s vow to hire 10,000 refugees in response to President Trump’s travel ban order.
Danhof questioned why CEO Howard Schultz’s heart wasn’t “heavy” when the Obama administration’s State Department in 2011 stopped processing visas for six months for refugees from Iraq.
“I have two quick questions: I understand that as you said ‘not every decision is based on economics,’ but economics are a hard reality. So, the first question is how much will investors have to spend so that company can properly vet refugees that the federal government admits it can’t always afford to vet? And why were you willing to have Starbucks’ reputation take a beating by attacking President Trump’s executive order when you lacked the courage to speak out against Obama/Clinton travel ban.”
Danhof’s question was met with audible boos from the audience.
Schultz responded that it’s not about politics, but instead it’s about compassion.
“If there’s one message that I think, I hope, you came away with today it’s that none of the things we’ve tried to do as a company, which is based on humanity and compassion, is based on politics. But it’s based on principles and our core beliefs,” Schultz said.
He reiterated that this hasn’t hurt the business either.
“I can unequivocally tell you…that there’s zero, absolutely no evidence whatsoever, that there’s any dilution in the Starbucks brand, reputation, or core business as a result of being compassionate,” Schultz said.
What the surveys have said
Earlier this month, Starbucks released a letter from a market research firm, Kantar Millward Brown, that refutes that the coffee giant’s brand perception dropped after the company vowed to hire 10,000 refugees in response to President Trump’s travel ban order.
In mid-February, YouGov released a report that Starbucks’ brand perception had fallen by two-thirds after Starbucks CEO Howard Schultz released his letter promising to hire refugees.
More recently, Bloomberg News reported that xAd — a market insights firm that uses customers’ mobile phone apps to track foot traffic — showed Starbucks’ share of foot traffic dropped to 11% in February, down from 12% in January. xAd’s methodology uses location data from ad requests from 100,000 mobile apps each month. A visit to a location is only recorded when the app is open and the ad has been served.
On Jan. 29, Schultz sent out a company-wide letter following Trump’s decision to sign an executive order temporarily halted citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen from entering the US. (That order has been stymied in court. This week, Trump signed a new travel ban executive order that excludes Iraq.)