New study shows Starbucks’ hardline stance on refugees took a hardline hit to its bottom line

Starbucks is learning that far left policies are not helping its profit margin.

The company’s pledge to hire 10,000 refugees in response to the president’s temporary travel ban has hurt customer opinion of the coffee chain and its sales, according to experts, Reuters reported.

YouGov Brand Index’s Buzz score showed that the Seattle based company’s brand image took a hit after its CEO, Howard Schultz, announced the decision to hire the refugees.

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Credit Suisse analysts found a similar pattern.

“Our work shows a sudden drop in brand sentiment following announcement of the refugee hiring initiative on Jan. 29th, to flattish from a run-rate of ~+80 (on an index of -100 to +100). Net sentiment has since recovered, but has seen significant volatility in recent weeks,” Jason West, an equity analyst at Credit Suisse, told CNBC.

The YouGov BrandIndex showed 30 percent of consumers said they’d consider buying from Starbucks when they made their next purchase of coffee before the refugee hiring announcement.

That went to 24 percent after the announcement.

“Consumer perception dropped almost immediately,” YouGov BrandIndex CEO Ted Marzilli said.

“That would indicate the announcement has had a negative impact on Starbucks, and might indicate a negative impact on sales in the near term,” he added.

Angry customers were probably not made any happier when the coffee chain offered to pay legal fees for employees affected by the president’s temporary travel ban.

Disgruntled former Starbucks customers might want to move their business to a military owned coffee company that vowed to hire 10,000 veterans in response to Starbucks’ refugee hiring announcement.

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Carmine Sabia


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