At the Starbucks annual shareholder meeting, one investor, Justin Danhof from the National Center for Public Policy Research, expressed frustration with the company’s vow to hire 10,000 refugees in response to President Trump’s travel ban order.
Danhof questioned why CEO Howard Schultz’s heart wasn’t “heavy” when the Obama administration’s State Department in 2011 stopped processing visas for six months for refugees from Iraq.
“I have two quick questions: I understand that as you said ‘not every decision is based on economics,’ but economics are a hard reality. So, the first question is how much will investors have to spend so that company can properly vet refugees that the federal government admits it can’t always afford to vet? And why were you willing to have Starbucks’ reputation take a beating by attacking President Trump’s executive order when you lacked the courage to speak out against Obama/Clinton travel ban.”
Danhof’s question was met with audible boos from the audience.
Schultz responded that it’s not about politics, but instead it’s about compassion.
“If there’s one message that I think, I hope, you came away with today it’s that none of the things we’ve tried to do as a company, which is based on humanity and compassion, is based on politics. But it’s based on principles and our core beliefs,” Schultz said.
He reiterated that this hasn’t hurt the business either.
“I can unequivocally tell you…that there’s zero, absolutely no evidence whatsoever, that there’s any dilution in the Starbucks brand, reputation, or core business as a result of being compassionate,” Schultz said.
What the surveys have said
Earlier this month, Starbucks released a letter from a market research firm, Kantar Millward Brown, that refutes that the coffee giant’s brand perception dropped after the company vowed to hire 10,000 refugees in response to President Trump’s travel ban order.
More recently, Bloomberg News reported that xAd — a market insights firm that uses customers’ mobile phone apps to track foot traffic — showed Starbucks’ share of foot traffic dropped to 11% in February, down from 12% in January. xAd’s methodology uses location data from ad requests from 100,000 mobile apps each month. A visit to a location is only recorded when the app is open and the ad has been served.
On Jan. 29, Schultz sent out a company-wide letter following Trump’s decision to sign an executive order temporarily halted citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen from entering the US. (That order has been stymied in court. This week, Trump signed a new travel ban executive order that excludes Iraq.)
In the letter, Schultz detailed plans to hire 10,000 refugees in the countries where the coffee chain operates. This was met with some backlash on social media, with some users calling for a boycott of Starbucks.
“We have a long history of hiring young people looking for opportunities and a pathway to a new life around the world. This is why we are doubling down on this commitment by working with our equity market employees as well as joint venture and licensed market partners in a concerted effort to welcome and seek opportunities for those fleeing war, violence, persecution and discrimination,” Schultz wrote.
The letter continued: “There are more than 65 million citizens of the world recognized as refugees by the United Nations, and we are developing plans to hire 10,000 of them over five years in the 75 countries around the world where Starbucks does business. And we will start this effort here in the U.S. by making the initial focus of our hiring efforts on those individuals who have served with U.S. troops as interpreters and support personnel in the various countries where our military has asked for such support.”
Afterward, the hashtag #BoycottStarbucks started trending on Twitter, with some criticizing the company for not hiring 10,000 veterans. Others, however, showed their support for the coffee giant on social media.
Starbucks already has a program in place dedicated to hiring military veterans. At the shareholder meeting, Starbucks revealed that it already surpassed its goal of hiring 10,000 military veterans, so they’ve pledged to hire 25,000 more vets and spouses. They’ve also detailed plans to open up 100 new military family stores.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.