Starbucks continues to face boycott over Israel's war on Gaza

Last weekend, Starbucks got a report that a New York store had been spray-painted with pro-Palestinian graffiti. A few hours later, at a store eight blocks away, a customer berated the employees, accusing the brand of being anti-Israel.

It’s been a tough few weeks for the world's largest coffee company. At a time when it hoped to be spreading holiday cheer and peppermint mochas, it’s juggling boycotts over Israel’s war on besieged Gaza and a unionisation effort at home.

In an open letter to employees on Tuesday, Starbucks CEO Laxman Narasimhan decried the vandalism of stores and escalating protests in the US and around the world.

"While I am grateful for so much, I am concerned about the state of the world we live in. There are conflicts in many parts. It has unleashed violence against the innocent, hate and weaponised speech and lies — all of which we condemn," he wrote.

"Our stance is clear. We stand for humanity."

Seattle-based Starbucks won't yet say how its sales have been impacted. The company’s next quarterly sales report won't come out until February. However, there are indications Starbucks is taking a sales hit.

In an early December report, J.P. Morgan analyst John Ivankoe lowered his US sales forecast for Starbucks’ fiscal first quarter, saying holiday sales appeared to be slower than promotions in the fall.

Starbucks' share price tumbled on the news.

Meanwhile, videos posted on X show protests and empty stores in the UK, Australia, United Arab Emirates and elsewhere.

Boycotts against Starbucks are also going strong in Muslim nations, including Türkiye, Egypt, Pakistan, Jordan and Indonesia.

Starbucks' self-inflicted wounds

Some of Starbucks' problems have been self-inflicted.

It kicked off a wave of anger in October when it sued Workers United — the union organising its employees — because the union had posted a pro-Palestinian message on social media.

On October 9, two days after Hamas fighters launched an unprecedented blitz in southern Israel, Starbucks Workers United posted "Solidarity with Palestine!" on X, formerly known as Twitter. Workers United — a Philadelphia-based affiliate of the Service Employees International Union — said in its lawsuit that workers put up the tweet without the authorisation of union leaders. The post was up for about 40 minutes before it was deleted.

Starbucks sued to stop the union from using its name and logo, saying the company had no official stance on the war and the union's post might confuse customers.

“Starbucks is seeking to exploit the ongoing tragedy in the Middle East to bolster the company's anti-union campaign," Workers United President Lynne Fox wrote in a letter to Starbucks.

Some US lawmakers, including Republican Sen. Rick Scott of Florida, called for boycotts of Starbucks.

"If you go to Starbucks, you are supporting killing Jews," Florida state Rep. Randy Fine, a Republican, tweeted on October 11.

The company's decision was seen by many as pro-Israel.

In mid-November, the company refiled its lawsuit. This time, it included language saying it respected workers' rights to express their views on Israel's war on besieged Gaza and other political issues, and said the lawsuit was about protecting workers' safety and Starbucks' reputation.

But the damage was done. It's a swift reversal for Starbucks, which reported record sales in its latest quarter, which ended October 1.

It celebrated the 20th anniversary of the Pumpkin Spice Latte and said growth was accelerating in China.

Problems with US workers

Even then, though, tensions were simmering.

US workers at more than 370 company-owned Starbucks stores have voted to unionise since late 2021, but the company and the union still haven't agreed to a contract at any of those stores.

On November 16, workers at several hundred US Starbucks stores walked off the job in protest.

That hurt sales on what is usually one of the company's busiest days of the year.

Starbucks, which opposes the union effort, has tried to shift the conversation on that issue.

Earlier this month, the company announced it was committed to bargaining with its unionised workers and reaching labour agreements next year.

Starbucks is one of many brands that have been facing boycott over Israel's war on besieged Palestinians in Gaza.

McDonald's, Coca-Cola, KFC, Burger King, Papa John's and Nestle are also being boycotted.

Western brands are feeling the impact and there are signs the campaign is spreading in many countries.

Some of the companies the campaign is directed at are perceived to have taken pro-Israeli stances, and some are alleged to have financial ties to Israel or investments there.