UPDATE: In the past day, there have been calls for Starbuck’s to fire the worker who called the police who arrested the black men. Rallies against Starbucks have started, at least in Philadelphia, where the incident took place.

Two black men were arrested at a Starbucks Corp. (NASDAQ: SBUX) location in Philadelphia, the City of Brotherly Love. Employees said they asked the men to leave. Police subsequently arrested them and took them away. One version of the incident is that the police asked them to leave as well, before their arrests. There is now a call to boycott Starbucks across the country because of the incident. It is visible enough that customers may not return to the coffee shops, at least for now. The problem is compounded by comments Starbucks’ founder made recently against white supremacists.

The incident was captured on video by someone in the store. Several patrons said the men had done nothing wrong and questioned police during the arrests. #BoycottStarbucks was among the most active hashtags on Twitter yesterday. The video of the incident has received almost 7.9 million views.

Starbucks CEO Kevin Johnson released a statement, which among other things said:

First, to once again express our deepest apologies to the two men who were arrested with a goal of doing whatever we can to make things right. Second, to let you know of our plans to investigate the pertinent facts and make any necessary changes to our practices that would help prevent such an occurrence from ever happening again. And third, to reassure you that Starbucks stands firmly against discrimination or racial profiling.

During a period when the treatment of black men in America is under increasing scrutiny, the efforts won’t be enough. Charges of racism won’t go away soon. The boycott will hurt Starbucks business, although there is no way to measure how much.

Starbucks does have the problem that, as a huge consumer-facing company, it cannot control what employees do at each of its locations. However, Starbucks has put itself in a position that makes the matter worst. Its founder Howard Schultz recently has spoken out against white supremacists. After a white nationalist rally in Charlottesville turned violent, Schultz commented:

The moral fiber, the values, and what we as a country have stood for is literally hanging in the abyss. We are at a critical juncture in American history. That is not an exaggeration. We are at and facing a crucible in which our daily life is being challenged and being questioned about what is right and what is wrong.

“What is right and what is wrong” is now at Schultz’s doorstep. The threat of a boycott is real, and so is the chance for lost business. Schultz has made his own bed. Several of his workers let him down.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.