Starbucks Stock to Be Affected by Major Policy Change?

While Starbucks (SBUX) is often treated as the go-to place for business meetings and gathering places for small groups, that could be changing very soon as the company backtracks on its policy.

Starbucks is changing its open door policy.

The open door policy that Starbucks has held since 2018 is about to change. They are now reversing their policy to allow anyone to come into the establishment and  use the restrooms and seating without paying for any item. All of the company’s North American stores will be affected by the policy, which will be posted in each of its locations.

The posted rules will also include a ban on harassment, discrimination, panhandling, vaping, smoking, outside alcohol, and any drug use. A statement from Starbucks spokesperson Jaci Anderson elaborated that this aligns Starbucks with the policies of many similar retailers.

Anderson said that the policy change is a way for people to feel more comfortable in their stores and to set clear expectations of what is allowed and not allowed on the premises. The hope is that the new policy will create a better overall environment. The employees will be responsible for enforcing the rules, and, if necessary, will ask violators to leave. In some instances, they may call law enforcement to help them remove violators.

The policy changed back in 2018 after a very public incident where two black men were arrested in Philadelphia at a Starbucks there after using the store for a meeting place without making a purchase.

Starbucks Stock to Take a Hit?

At the moment, Starbucks stock has not been hurt by the news, with the price up by 0.15% in premarket trading for Tuesday. The company will likely have to turn away many visitors to its North American branches, but paying customers may take longer to react to the change.

If there is more bad publicity for the company like there was back in 2018 before the policy change, we do expect the company to suffer on the stock markets as a result.

Starbucks did not immediately suffer as a result of the 2018 incident, with the CEO Kevin Johnson stating publicly that sales were not affected. However, the company shortly thereafter held a day for racial bias training and closed all its stores during that period, losing millions as a result. The company also had to close 16 stores throughout the US (primarily in Los Angeles and Seattle) due to safety violations caused by its open door policy.

Starbucks stock has dropped for much of the last week but then climbed this morning and looks like it will continue to do so. If there is fallout from the policy change, that will likely come in the next few weeks as stores try to enforce the new rules.

 

 

Since then, though, employees and customers have struggled with unruly and even dangerous behavior in stores. In 2022, Starbucks closed 16 stores around the country — including six in Los Angeles and six in its hometown of Seattle — for repeated safety issues, including drug use and other disruptive behaviors that threatened staff.

 

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ABOUT THE AUTHOR See More
Timothy St. John
Timothy St. John
Financial Writer - European & US Desks
Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.
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