Schultz’s 2020 Foray Risks Blowback to Starbucks in Blue America

(Bloomberg) -- The map of Starbucks Corp. locations in the U.S. closely follows the nation's electoral landscape and that could cause headaches for the coffee company if former Chief Executive Howard Schultz runs for president.

The possibility of an independent presidential bid by Schultz has triggered a vigorous backlash among Democrats, who argue his candidacy could split the opposition to President Donald Trump and help ensure his re-election.

It just so happens that those Democrats are most heavily concentrated in the urban areas and coastal states where Starbucks does the bulk of its business.

Almost 7 of 10 Starbucks stores are in the roughly 500 counties Democrat Hillary Clinton won in the 2016 presidential election, a Bloomberg analysis of data from location intelligence firm Esri shows.

The potential for Starbucks to get hit by protests or an organized boycott has triggered some investors to boost bets against the company in recent weeks. The corporation's leaders have sought to distance themselves from Schultz's presidential ambitions, but that's a challenge considering the 65-year-old billionaire built the company into a global brand and remains one of its top shareholders.

Schultz was in Washington on Thursday to promote his new book and a progressive group parked a mobile billboard outside a heavily trafficked Starbucks store downtown with a sign that read: “Coming Soon? Boycott Starbucks.” The sign also was positioned across the street from the venue where Schultz was speaking.

Starbucks locations concentrated in counties Clinton won

Schultz, who was born in Brooklyn and spent decades at the company before stepping down as executive chairman last year, has said he doesn't expect to make a decision for another three or four months. In public appearances he's confronted the concerns that his candidacy would help Trump.

“I can promise you all nobody wants to see him fired more than me and I will do nothing whatsoever to be in a position where my role, responsibility in running for president — if I decide to do that — that would produce Donald Trump's re-election,” Schultz said Thursday in Washington.

If he does announce a presidential bid, there are certain to be protests. Neera Tanden, the president of the Democratic-aligned think tank Center for American Progress, has threatened to organize a national boycott if Schultz runs. Liberal filmmaker Michael Moore has called for a boycott until Schultz announces he's not running. And at least two Twitter hashtags around the topic -- #BoycottStarbucks and #NoHowardNo -- have popped up and include people chronicling their own personal boycotts and calls for others to do the same.

Politics and Business

“There very well likely could be a risk,” said John Gordon, principal at Pacific Management Consulting Group, a restaurant and franchisee consultant. “These retailers, they need to stay out of politics because this country is divided on a wire, and Howard is so identified with Starbucks.”

For now, there's no widespread protest.

“Boycotts don't happen overnight and it's not a weapon that you want to shoot at the outset,” said Bud Jackson, chairman of the American Working Families super political action committee that organized the #NoHowardNo effort and sponsored Thursday's billboard. “This will be an exercise to apply more and more pressure the longer he holds out.”

American Bridge, a Democratic-leaning super-PAC that typically reserves its firepower for Republicans, is also actively working against a Schultz candidacy.

“The more people who speak out against this train wreck the better,” said Andrew Bates, a spokesman for the group. “If Howard Schultz runs for president, the only thing he'll do is make sure Donald Trump secures a second term.”

Company Position

In hopes of tamping down any protest movement, one of the nation's top Democratic public affairs firms, SKDKnickerbocker, has been reaching out to party leaders and activists on Starbucks' behalf to ask that the company be left out of the feud between progressives and Schultz. That effort was first reported by the Daily Beast.

Reggie Borges, a Starbucks spokesman, declined to comment and instead pointed to a Jan. 28 letter sent to employees by Chief Executive Officer Kevin Johnson.

“Many of us will inevitably be asked if the company supports a possible presidential candidacy of Howard and what changes for Starbucks,” Johnson wrote. “As a company, we don't get involved in national political campaigns. And nothing changes for Starbucks.”

Even with the potential protest threat, the company's stock has managed to gain 5.6 percent since a slight dip following the Jan. 27 broadcast of a “60 Minutes” interview with Schultz where he strongly suggested he'd run for president. It has tracked positively along with the broader stock market and closed Thursday at $70.84.

Jennifer Bartashus, a Bloomberg Intelligence analyst, is skeptical that any protests would change customer behavior. “When they wake up in the morning, are they going to say I'm so upset with Howard Schultz I'm not going to get my coffee? It's a little hard to envision,” she said.

--With assistance from Emma Kinery.

To contact the reporters on this story: John McCormick in Chicago at jmccormick16@bloomberg.net;Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, John Harney

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