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Starbucks' racial blunder shows it's too invested in the 'yoga-pants' set and must diversify culture, PR exec says

Philly.com — Joseph N. DiStefano Philly.com

April 16--Starbucks shares opened lower early Monday, moving down slightly as most stocks rose, as news and social media shot images around the country of dozens of protesters at the Rittenhouse Square-area store where two African American men were detained by city police Thursday evening after store staff complained they hadn't ordered and wouldn't leave.

The coffee chain's stock had slipped last week after analysts warned the company will have a tough time growing sales as fast as it had projected.

"The CEO making a trip to Philadelphia is certainly a first move in the right direction. said Donald J. Tibbs, professor of criminal law and procedure at Drexel University's Kline Law School." "It's very difficult to see this incident at the Starbucks as anything other than a racial profiling scenario. People meet at the Starbucks all the time. They wait for other people to arrive. In that moment, they make a purchase. I have done that on numerous occasions. I've been given the key to use the bathroom while I am waiting."

The incident occurred in a wealthy, largely white neighborhood, Tibbs added. "The gentlemen who were handcuffed don't fit that demographic -- they are black, they are male, the way they are dressed."

Tibbs said Starbucks CEO Kevin Johnson acted "admirably" in flying to Philadelphia to apologize once the arrests blew up on social media, fueled by a video of the incident. "They have to review their policies in terms of asking potential patrons to remove themselves with the establishment."

But Tibbs challenged the chain's determination not to blame individual staffers: "Someone on the staff set this in motion. They had to have said they were there to meet someone else prior to the police being called. Not only do you need to change your policies, you need to give your staff training to understand how implicit bias and white privilege works. You have to give responsibility to the management." As to lasting damage, "I know I won't be making purchases at Starbucks for awhile. It is an international incident."

"I strongly suspect Starbucks will not see any lasting damage from this incident," so long as the protests remain local and the company keeps responding, said Kevin Werbach, a legal studies and business ethics professor at the University of Pennsylvania's Wharton School of business. Starbucks has "created a reservoir of good will" by portraying itself as a socially-responsible company, and "they have responded very aggressively in apologizing and saying they will not let this happen again," he added.

The arrested men's lawyer, Lauren Wimmer, said they went to the store for a business meeting with developer Andrew Yaffe, who had invited them for coffee. Videos of the arrest, which spread to millions on social media last weekend, show the developer arriving on the scene and questioning the arrests, while officers insist on detaining and removing the men, who were released around 12:30 a.m. Friday without charges.

Starbucks chief executive Kevin Johnson flew from the company's Seattle headquarters to Philadelphia Sunday night to apologize for the incident. Philadelphia Police Commissioner Richard Ross on Saturday said a supervisor and a group of police had detained the men after complaints from Starbucks staff. Even as an Internal Affairs unit was conducting an active investigation into what happened, Ross declared that police did "absolutely nothing wrong" and were following the department's usual policy when business owners complain that people won't leave and are trespassing.

Some protesters had called on the company to fire the manager on duty when police were called. But Starbucks officials on Monday urged protesters from Black Lives Matter and other groups to blame the chain, not store staff.

Community and racial disputes are a risk for companies that rely on low-paid retail employees to deal with the public. Despite cultivating a liberal image, "every company can make mistakes, especially companies that have large numbers of front-line employees. It comes back to culture," Werbach added. "Starbucks can't depend on highly compensating employees [to ensure] they are taking appropriate behavior. They have to create a culture where people who work at Starbucks feel proud of working at Starbucks, and feel a personal impetus to protect the brand."

In blaming his company, not staff or police, for the arrest, Johnson admitted Starbucks' culture needs improvement. "Watching the video, it was painful," Johnson told the Inquirer this morning. The result was "reprehensible." He said he's studying what to do.

Werbach noted, for example, that Amazon, the online retailer and distribution giant, had weathered past embarrassments over grueling treatment of thousands of warehouse employees by continually working to improve its "tremendous consumer focus." Uber and other companies known for riding roughshod over critics can have a tougher time when they face scandal and negative news.

As for eating and drinking establishments, Cracker Barrel paid almost $9 million in 2004 to settle allegations that the restaurant chain mistreated black customers and discriminated against black workers.

IHOP, run by International House of Pancakes LLC, apologized in March after a waitress asked black teenagers to pay upfront for a meal at an Auburn, Maine IHOP. And Applebee's apologized, fired workers and closed a restaurant in Independence, Missouri, after two black women said they were falsely accused of not paying for meals in February, according to the Associated Press.

Greg Matusky, founder of Gregory FCA in Ardmore, said "I think the Starbucks incident is fraught with peril as the company struggles to maintain its relevance in a changing world. There's something seriously wrong when management calls the cops on two African American professionals for sitting at a table and waiting for a friend to show up before ordering.This disconnect doesn't bode well for Starbucks.

"Take a look. Starbucks is way too invested in the yoga-pants demographic. It has to diversify its culture and approach. Ironically, that opens the door for other brands, such as Philly's urban, authentic La Colombe. Strictly from a branding standpoint, Starbucks needs to acquire brands with that kind of sensibility and sensitivity and use their connection to better understand the reality of America's diversity."

Investors may also begin looking at taking shareholder activism at Starbucks to the next level.

"We haven't yet decided" on whether to boycott Starbucks as a business or to divest its shares from retirement portfolios, said Reverend Mark Tyler, pastor at Mother Bethel AME congregation in Center City Philadelphia.

Tyler and Rabbi Sean Zevit of Manayunk, plus clergy leaders representing more than fifty interfaith congregations in southeastern and central Pennsylvania, are planning a march and sit-in at 4pm Monday at the Starbucks at 1801 Spruce Street.

"We're having a conversation with 20,000 clergy this afternoon on a phone conference call, to figure out the appropriate response to Starbucks. Everything is on the table," Tyler said, referring to a business response. "But we don't want it to hurt employees of color who work at Starbucks. Sometimes a hasty boycott can have unintended consequences."

Marc Lamont Hill, founder of the black-owned Uncle Bobbie's coffee cafe in Germantown, said the culture of coffee houses is that customers often come and wait for friends without purchasing anything.

"That's why so many coffee houses die, because customers buy nothing, or buy a water and stay for hours. It's so foreign to me for police to be called for something so minor," Lamont Hill said. When he saw the video, "I thought 'why would I call the police on my customers'"?

Uncle Bobbie's brews local Philadelphia brand La Colombe coffee, and Lamont Hill said he doesn't frequent Starbucks, although he did attend a rally there on Sunday.

"Part of being a black-owned space or a cafe is the sense of safety. At Uncle Bobbie's we have better coffee -- and you don't go to jail."

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