Starbucks As It Deals With Social Issues and A Change in Leadership

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Last week Starbucks’ company-owned stores shutdown to dedicate four hours nationwide to educate employees about racial-bias with the goal of preventing discrimination moving forward.

Although this initiative may not be enough to solve the problem of racism in America, most would agree that it is a step towards the right direction.

More than 8,000 stores shut down operations so about 175,000 employees could “go through a training program designed to address implicit bias, promote conscious inclusion, prevent discrimination and ensure everyone inside a Starbucks store feels safe and welcome,” as noted in a company statement.

The temporary closure resulted in $16.7 million in cost for the Seattle-based company, as estimated by Bloomberg. The publicly traded company went on to state that this type of training will become part of the onboarding process for all new employees, or “partners” as Starbucks calls them.

These efforts came after two African-American men were arrested in April after they were loitering without first making a purchase at a Philadelphia Starbucks. This resulted in the implementation of a new, more inclusive guideline when it comes to welcoming people from the community who haven’t necessarily bought anything from the store, but would like to make use of the coffee shop’s restrooms or patios. Starbucks wants everyone to think of their cafes as a “third place between home and work”— hence the name for the Third Place Policy.

Some, like NBC’s Megyn Kelly, have criticized the new open door policy, saying it could lead to employees and paying customers having to deal with maybe homeless people or drug addicts, as she mentioned in her show last week. Others, like NBC contributor Jenna Bush Hager, said “it’s also compassionate,” as reported in KGW8.com.

All of this is going on while Starbucks is experiencing a change in leadership. That’s right, Howard Schultz, Starbucks’ Executive Chairman will be retiring on June 26, leaving Kevin Johnson as CEO and Myron “Mike” Ullman as Starbucks Chairman. This is something that was planned for over a year as Schultz explained in an MSNBC interview this week. Schultz new title will be Chairman Emeritus.

As of June 5, the market closed with Starbucks shares down 2.44 percent at $55.68 USD.

It will be interesting to see how customers’ attitudes may differ with the implementation of the Third Place Policy as well as how the company’s shares may be impacted by the leadership transition.

To learn more, read Reuters!