Boycott over Gay Marriage Won’t Harm Starbucks
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By any measure, Starbucks Corp. (NASDAQ: SBUX) has had a spectacular year. Their stock has surged 50%, they have new ventures on tap in both India and China, their Starbucks Card is a smashing success, and they’re being boycotted. What?
It’s true. Along with 100 other companies such as Microsoft, Google and Amazon, Starbucks has pledged its support for the same-sex marriage law currently being considered in Washington state. Now, under normal circumstances, a company would be lauded for taking a stand in favor of those who have been denied the rights enjoyed by the majority of persons. Not so in this case. The president of the California-based USA Christian Ministries has called a national boycott of the company for its stance. Interestingly, none of the other 99 supporting businesses were targeted, though.
So far, there doesn’t seem to be any negative effect on Starbucks, and I’m almost certain that there won’t be any. At this writing, the stock has surpassed its 52-week high and I’m thinking that people who don’t normally do so might even pony up a fiver for a latte or cappuccino just to show solidarity.
Starbucks is clearly aligned with the majority on this issue, so suffering any ill effects from this boycott is doubtful--though the company has so many irons in the fire at this point that it would scarcely have time to notice if it did. In addition to its plan to open 50 new cafes in major cities in India, Starbucks has also inked a deal with Ai Ni Group to expand its operations in the Yunnan province to include exporting the area’s coffee beans as well as operating dry mills there. Meanwhile, the company will cut the ribbon on its first café at Oslo Airport in Norway on February 9.
Here in the U.S., Starbucks is leading the charge to introduce the flip side of the dark roast. Lightly-roasted coffee beans are setting the café set atwitter, as those who never really got used to the heavy-handedness of dark roasts have their day. Starbuck’s Blonde Roast is now available in all of its nearly 11,000 stores nationwide and will appear in your neighborhood grocery store very soon—if it isn’t on the shelves already.
The company is also making money off of the most romantic day of the year. In an update of its Cup Magic app, users can now send a type of digital gift card to others to be delivered on Valentine’s Day. Not only that, but the app’s messaging system obligates those on the receiving end to go to Starbucks and make a purchase. Only then can they aim their phone at one of the special cups to read the message. In addition, the Starbucks card, which is similar to an actual gift card, has been driving sales to new heights. The company reported additions to the cards in the amount of $2.2 billion from September 2010 to September 2011, while, according to the Wall Street Journal, the whole gift card industry estimated $90 billion was loaded onto all other cards during the same time span.
When the gay marriage legislation passes, as it most certainly will, Starbucks may gain in other ways. According to an article in the Seattle Times, a report by the UCLA Law School's Williams Institute predicts that same-sex weddings would produce an extra $88 million each year in economic benefits for the state of Washington. After all, those white cups at wedding receptions need to be filled with some brand of coffee. I predict that brand will be Starbucks.
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