Starbucks Reputation Hits 10-Year Low

By Douglas A. McIntyre Updated Jan 11, 10:58PM EST · Published May 31, 6:35AM EDT

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Starbucks Reputation Hits 10-Year Low — © courtesy of Starbucks Corp.

Among the reasons the Starbucks Corp. (NASDAQ: SBUX) brand is so strong are the quality of food and beverage, store ambiance and what appear to be happy and friendly employees. The friendly employee aspect has been a puzzle to some because entry-level workers are paid poorly.

A racial profiling scandal in a Starbucks has changed a lot of these perceptions, with customers and employees. A new study shows the company’s reputation with workers.

New research from the YouGov BrandIndex shows that Starbucks has done poorly since the incident when people are asked if they would be proud of the company if they joined as workers. The study’s conclusion:

Starbucks’ workplace reputation score is at its lowest level in at least 10 years, a difficult blow for a company that has been well-known for its employee benefits and culture, including helping pay for college tuition.

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In another measure of the survey, YouGov reported on “purchase consideration,” which is whether people would shop at Starbucks “when they are in the market for their next purchase.” Presumably, these purchases refer to coffee and food. The findings:

Several weeks after the racially-charged Philadelphia incident, the other metric which has not recovered is Purchase Consideration, YouGov BrandIndex’s measurement of potential sales revenue. On April 20, 28% of consumers would consider purchasing from Starbucks the next time they were buying food or drink. For the past couple of weeks, the score has been hovering around 24%, its lowest since April 2017.

While the first set of results speaks to the company’s ability to hire, the second speaks to what may happen to Starbucks store revenue. Starbucks investors won’t have a sign of this until the company reports its next quarterly figures. However, it is safe to assume that store traffic and sales will not be hurt.

Starbucks may recover from its recent problems, but the YouGov research shows that recovery probably won’t come quickly or soon. It has too much ground to make up.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.