Starbucks MY in a 'no-win' situation, say PR experts on Israel-Gaza statement

Starbucks Malaysia has seen its brand sentiments continue to remain largely negative despite releasing a lengthy statement attempting to clear up misinformation and to let consumers know that it "stands for humanity" last week. 

According to media intelligence firm CARMA, before the statement by Starbucks, conversations on social media about it were 2.1% positive and 65.5% negative.

Following the statement, netizen’s sentiments dipped slightly to 1.3% positive and 57.9% negative, showing a largely unaffected sentiment reading. 

Don't miss: Starbucks MY says it has 'no political agenda' as boycott goes strong 

The word clouds from before and after the statement also remain relatively unchanged with words such as 'Palestine', 'boycotting' and 'genocide' continuing to dominate.

This comes days after Starbucks released a statement to clear up misinformation after being battered by months of ongoing boycotts as a result of its alleged support of Israel in the ongoing Israel-Hamas war.

Clearly, Starbucks' attempts to quell the ongoing boycott against it are not working and it is likely because the coffee chain took a significant amount of time to issue a statement in the first place, according to Ashvin Anamalai, chief executive officer at DNA Creative Communications. He said:

It's frankly baffling that a response has only materialised after a long period of deafening silence.

Anamalai explained that this delay sends a clear message of either a lack of urgency or, a "complete disregard" for the public's concerns.

"In today's fast-paced world, silence is deafening, and inaction speaks volumes. This delayed response is likely to fuel further frustration and erode trust between the public and the entity responsible," he said. 

Anamalai added that when public opinion has reached a fever pitch, it often signifies a culmination of concerns that haven't been adequately addressed. This suggests a potential lack of earlier acknowledgment or proactive steps to address the issue, which can further erode public trust, he said. 

"It's important to understand that crisis communication thrives on preparation and timeliness. Waiting until the situation boils over before issuing a statement can reinforce a perception of unpreparedness or being reactive rather than proactive," he said, adding:

It can also make the statement feel insincere or like a last-ditch effort to salvage the situation.

Quality over speed

Saying that, Anamalai said that while a statement alone might not drastically sway public opinion, it can still serve as a starting point for rebuilding trust. "The key lies in acknowledging the delay, demonstrating genuine remorse or understanding of the public's concerns, and outlining concrete steps to move forward," he said. 

Adding to his point, Syed Mohammed Idid, general manager, strategic communications & stakeholder engagement at West Coast Expressway said that while a swift response is always preferable, it's equally important to ensure thorough analysis and a well-crafted message.

He added that authenticity is also paramount with a situation such as this. 

"A well-crafted statement that feels genuine and transparent holds more weight than a generic, corporate-sounding message. It's crucial to understand that audiences are often skeptical and can easily detect disingenuous communication," he explained. 

Idid added that the situation serves as a valuable learning experience not just for Starbucks, but for all companies. Proactive communication, authentic engagement, and a commitment to transparency are critical tools in navigating any crisis situation, he said. By adopting these principles, companies can build trust with their stakeholders and emerge stronger from challenging situations.

A no-win situation?

While these are great points, at the end of the day, when it comes to a crisis comms situation of this magnitude, there are often no winners, according to Beverley Hon, director at Xcess Communication.

"I've seen comments from the early stages when the boycott started and even then, people refused to believe anything other than what they felt they knew about the situation or Starbucks Malaysia's role," said Hon. 

She added that from a PR perspective, it is important to monitor what the public sentiment is before making a statement.

I think Starbucks has been put in a no-win situation.

"Had they issued a statement earlier, they could likely have been accused of defending themselves too soon and would likely have been accused of being guilty," explained Hon. 

She added that a lot of people have become "emotionally involved" in the conflict and it really is an unenviable tricky position brands find themselves in because it's a "damned if you do, damned if you don't" situation.

What did Starbucks say?

These comments come days after Starbucks released a statement to clear up misinformation after being battered by months of ongoing boycotts as a result of its alleged support of Israel in the ongoing Israel-Hamas war.

"Truth matters. In response to misinformation, we’re sharing the facts on what Starbucks believes and stands for," said Starbucks last week. 

"At Starbucks, truth and transparency are essential to fulfilling our mission, upholding our promises and living our values. So, when misinformation about our company spreads at lightning speed in an increasingly polarised world, we believe it’s critical to respond with facts and to reiterate our position," it added, saying that due to ongoing false and misleading information it was consolidating some of the most frequently asked questions about the brand – and responding with facts.

Starbucks explained that though its roots are in the United States, it is a global company with stores in 86 markets, including over 1,900 stores in 11 Middle Eastern and North African markets.

"Our 400,000 partners around the globe have diverse views about a wide range of topics. Regardless of that spectrum of beliefs, Starbucks has been and remains a non-political organisation," it said, adding:

Neither Starbucks nor the company’s former chairman, president and CEO Howard Schultz provide financial support to the Israeli government and/or the Israeli Army in any way. 

It added that Starbucks is a publicly held company and as such, is required to disclose any corporate giving each year through a proxy statement.

"Our position remains unchanged. Starbucks stands for humanity. We condemn violence, the loss of innocent life and all hate and weaponised speech," said Starbucks. 

"Despite false statements spread through social media, we have no political agenda.  We do not use our profits to fund any government or military operations anywhere – and never have"

It explained also that Starbucks in Malaysia is wholly-owned by a public-listed Malaysian company.

No stores in Israel

Starbucks did say that it has been in the Middle East for over 20 years.

Local business partner Alshaya Group (a private Kuwait family business) operates nearly 2,000 Starbucks stores across the Middle East and North Africa region. "In the region, we currently only have stores in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey and United Arab Emirates.," said Starbucks, adding:

It is important to note that Starbucks does not have any stores in Israel.

Starbucks closed its Israel store in 2003 due to the on-going operational challenges that it was experiencing in that market. "We believe it remains the right decision for our businesses," it said. 

It also said that it was "absolutely untrue" that it had sent profits to the Israeli government or army. 

Addressing if it plans to re-open its stores in Israel should the opportunity arise, Starbucks said that when and where a business case makes sense and it sees a fit for the Starbucks brand in a market, it will work closely with a local partner to assess the feasibility of offering its brand to that community.

"We will therefore continue to assess all opportunities on this basis. At present, we will continue to grow our business in the Middle East as we have been very gratified by the strong reception of the brand in the region. We continue to work closely with our business partner, Alshaya Group, in developing our plans for the region," it said. 

The Workers United

In early October 2023, statements about the on-going atrocities were posted on the ‘Workers United of Starbucks’ social media using Starbuck' company logo and name, which were then mistakenly attributed to Starbucks instead of Workers United and its affiliates and representatives.  

"To be clear, Starbucks respects others’ right to express their own viewpoints on political and social issues. However, Starbucks does not approve of the misuse of Starbucks name and logos when expressing those views," it said. 

Starbucks is currently working with Works United to complete bargaining and contract ratification in 2024 for stores that have chosen to be represented by Workers United, according to Sara Kelly, executive vice president, chief partner officer, Starbucks Coffee Company.

"I want to let you know that we have reached an important milestone. We have agreed with Workers United that we will begin discussions on a foundational framework designed to achieve collective bargaining agreements, including a fair process for organising, and the resolution of some outstanding litigation," said Kelly. 

The statement from Starbucks comes shortly after RHB Group, Malaysia's integrated financial services group, reportedly issued a research note advising investors to sell their shares in its franchise owner, Berjaya Food in December last year. The bank reportedly noted a 24% slip in stock prices at the time. 

The recommendation came after ground checks of Starbucks outlets showed at least a 30% fall in foot traffic. This is despite shopping centres being crowded, and most of Starbucks' competitors having regular footfalls. 

According to the New Straits Times, RHB's research note said the situation is worse than expected and that Starbucks has slashed forecasts for its financial year 2024-2026 net profit by 21%, 17% and 7%. 

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