Starbucks CEO says 'We stand for humanity,' looks to separate company from Israel-Palestine statements by Starbucks Workers United

By Weston Blasi

There's been a controversy brewing after pro-Palestine comments by Starbucks Workers United, the labor group pushing for unionization at the coffee chain.

The chief executive of Starbucks Corp. thinks the recent spike in vandalism at some of its coffee-shop locations is based on a "misrepresentation" of the company's beliefs on the Israel-Hamas war.

CEO Laxman Narasimhan attempted to distance the Seattle-based company from the controversy caused in part by comments seen as pro-Palestinian by Starbucks Workers United, the labor group pushing for unionization at the chain.

"Many of our stores have experienced incidents of vandalism. We see protestors influenced by misrepresentation on social media of what we stand for. We have worked with local authorities to ensure our partners and customers are safe," Narasimhan wrote in an annual letter to shareholders.

The Starbucks Workers United union posted "Solidarity with Palestine!" in a since-deleted X tweet in the wake of Hamas' deadly attacks on Israel on Oct. 7, which killed an estimated 1,200 Israeli civilians. The attacks triggered an ongoing conflict that has reportedly seen nearly 20,000 Palestinian civilians killed as part of Israel's military response.

Workers United later said that workers posted the tweet, which was up for about 40 minutes, without the authorization of union leaders. Starbucks (SBUX) has tried to clarify its position on the Israel-Hamas conflict, saying it disagrees with the views expressed by the union. Starbucks sued the union in October, alleging trademark infringement and demanding the union no longer use the company's name and logos.

One instance of vandalism at a Starbucks location includes a Starbucks Reserve Roastery in Seattle that was temporarily closed after protesters smashed the windows and spray-painted the walls with "Free Gaza" and "Free Palestine." A similar situation happened at several Starbucks locations in New York City.

Narasimhan's letter did not mention the Middle East or the Israel-Hamas conflict explicitly, but said the company is against violence.

"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 weaponized speech, and lies - all of which we condemn," he continued. "Our stance is clear. We stand for humanity."

Representatives for Starbucks and the Starbucks Workers Union did not immediately respond to requests for comment.

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The instances of vandalism at some Starbucks locations come as the company is at odds with some of its workers. Staff at over 370 of Starbucks' 9,600 U.S. stores have voted to unionize with Workers United. The company has long opposed the unionization effort, but has agreed to recognize their group and collectively bargain on a contract. As of December, the company and Workers United haven't yet agreed to a contract at any of those stores.

The company has not stated how the protests and conflict with the union have impacted sales, if at all. Starbucks doesn't report its next quarterly earnings until February 2024. But there is some indication from at least one analyst that the company may have taken a financial hit this holiday season.

In an early-December report, JPMorgan analyst John Ivankoe lowered his U.S. sales forecast for Starbucks' fiscal first quarter, saying holiday sales appeared to be slower than in the fall.

Shares of Starbucks Corp. moved 0.4% higher during Thursday afternoon's trading. Starbucks is down 2.7% over the last 12 months, compared to an S&P 500 Index which is up 23.7% over the same period.

Read on: Workers at a Wells Fargo branch become the first at a major U.S. bank to unionize

-Weston Blasi

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12-21-23 1459ET

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