Continuous Decline
Starbucks, the famous American coffee chain, is facing a tough time as its stock continues to decline. The company has been dealing with a combination of issues, including a widespread boycott, employee strikes, and weak demand for promotional campaigns.
On Friday, the company's shares closed at $96.75, down 1.1% for the day. This marks the 16th session in a row where the stock has lost value, compared to only 4 sessions where it saw gains. Since November 16th, the stock has lost 9.7% of its value, going from $107.21 to around $96.8.
This decline has resulted in a loss of over $12 billion in market capitalization for Starbucks. The company's value has dropped from $123.2 billion a month ago to $111.2 billion.
Mustafa Fahmy, CEO of Strategies and Emerging Markets at Fortress Investment Company, believes that Starbucks has been unable to change consumer perception due to the boycott. He predicts that the company's financial results for the fourth quarter will be very bad, impacting its overall annual performance.
Conflict with Workers
In October, Starbucks filed a lawsuit against the Café Company Workers Union after they expressed solidarity with Palestinians. This led to strikes by workers who were also dealing with wage claims.
The boycott campaigns against Starbucks expanded beyond the Arab and Islamic world to the United States and other regions. The company's broad solidarity with Israel during the war on Gaza contributed to the boycott.
Starbucks has over 35,000 branches worldwide, including more than 9,000 in the United States and nearly 1,900 in the Middle East and North Africa. The company employs over 19,000 people.
The company is also facing labor issues, with the US Labor Agency seeking to reopen 23 stores that were allegedly closed to discourage union campaigns. Workers at over 360 US branches have voted to join unions since 2021, and Starbucks faces over 100 labor complaints.
Starbucks denies any wrongdoing and claims to respect workers' rights to join unions. The company stated that it routinely reviews its stores and makes changes for legitimate reasons.
Starbucks is currently facing challenges in maintaining its brand reputation due to the boycott and labor issues. The company's stock has been on a continuous decline, and its financial results are expected to be negatively impacted.
Sources: Agencies
