In October, Starbucks (NASDAQ: SBUX) and the union representing some of its workers found themselves entangled in a legal battle.
The coffeehouse giant took the union, Workers United, to court, alleging trademark infringement after the union published a social media post expressing support for Palestine in the wake of Israel’s recent bombings in the Gaza Strip.
The lawsuit demanded that Workers United cease using the name “Starbucks Workers United” for their worker-organizing group, contending that it had incited customer outrage and tarnished the company’s reputation.
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The union’s post on X, titled “Starbucks Workers United Stands With Palestine,” was up for less than an hour before it got deleted. However, Starbucks’s aggressive reaction to the pro-Palestine post sparked another challenge for the company, igniting a social media storm with calls for boycotts against the coffeehouse chain.
Students launch boycotts against Starbucks
Last week, students of the Loyola Marymount University gathered in front of the Starbucks store close to the campus to support boycotts against the company in support of the “Palestinian liberation movement,” the members of the protest said.
The group brought handmade signs showcasing short quotes like “Your dollars matter,” and “Resistance is justified when people are occupied.” Additionally, a big portion of the group chanted “Free, free, free Palestine” during the protest.
“I know me and my friends have been feeling very helpless about this situation and wanted to effect change in some way. I wanted to give peers, students, a way every day they can create a change.”
– said said Sophia Hutton, a senior communication studies major.
‘Starbucks, Starbucks, you can’t hide’
The protest launched by the students came shortly following a surge of social media posts showcasing pro-Palestine gatherings in front of Starbucks stores across various countries.
For instance, an October 31 post on TikTok shared by catchupnews posted several videos showing protests taking place against Starbucks across countries such as Turkey, Qatar, and Malta.
According to the video, the moves came after the coffeehouse chain operator “voiced support for Israel in an official letter.”
“Starbucks, Starbucks you can’t hide, you make drinks for genocide,” chanted one group that held a protest in front of one of Starbucks’s stores, referring to Israel’s recent bombings of Gaza that killed more than 9,000 people, per the reports.
“Boycotts work. A solid third of the usual amount of people that we get coming in are no longer showing up.”
– one Starbucks worker said in the video.
Starbucks stock price analysis
At the time of writing on November 6, shares of Starbucks were changing hands at $103.16, up around 0.5% in the past 24 hours,
Over the past week, SBUX gained around 10% and over 11% on the month.
Clearly, the impact of boycotts against Starbucks hasn’t yet been reflected in the company’s share price.
While it remains uncertain whether this boycott movement will continue gaining momentum, the expansion of such protests against the coffeehouse chain is undoubtedly cause for concern for Starbucks.
As such, investors will closely monitor the ongoing backlash and brace for a potential stock price impact, as we’ve seen in similar situations with companies like Disney and Anheuser-Busch in 2023.
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