Published on: March 27, 2013by Kevin Coupe
When retailers take political or cultural positions, it can have an impact on sales. While there's nothing necessarily right or wrong about taking a stand that can bolster support in some communities while raising hackles in others, it is critical that business leaders understand that such actions have consequences.
That's what Chick-fil-A found out when its CEO, Dan Cathy,. was quoted as saying he personally supported only the "Biblical definition" of marriage, which means between one man and one woman. This put Chick-fil-A right in the middle of the gay marriage debate, irritating some consumers but also leading to considerable support for the company in conservative circles.
Since then, Chick-fil-A has emphasized that it does not discriminate against anyone, and there have been reports that the company has stopped funding groups opposed to same-sex unions.
Well, a similar case has occurred, raising exactly the same issues ... though from the opposite political/cultural perspective.
Last week, at Starbucks' annual shareholders meeting, CEO Howard Schultz was questioned by stockholder Thomas Strobhar, the founder of the Corporate Morality Action Center, which opposes gay marriage. Starbucks last year endorsed a Washington State proposal that would have legalized gay marriage, and Strobhar criticized the endorsement, saying that it hurt sales and profits because of a small-scale boycott of the company organized by the National Organization for Marriage.
Schultz essentially told Strobhar to take a flying leap: "If you feel, respectfully, that you can get a higher return than the 38 percent you got last year, it’s a free country. You can sell your shares of Starbucks and buy shares in another company. Thank you very much."
It was, the Washington Post notes, "language one rarely hears from corporate executives," though the story notes that it garnered much applause from the shareholder audience. And, it can be argued that while Starbucks' position may be cultural, it also can be seen as having an economic calculation:
"Schultz’s support of same-sex marriage is very much about dollars and cents — or at least about brand value and employee retention, which both affect the bottom line. For many big companies, the fear of losing out on talented employees or loyal customers who support gay rights is even greater than the fear of losing out on the dwindling number of those who don’t.
"That’s especially the case for a company like Starbucks, with its coffeehouse roots, its urban customer base and its touchy-feely talk about employees (it calls them 'partners' and offers benefits other fast-food restaurants do not). And Schultz is not alone in voicing his support for same-sex marriage; CEOs including Goldman Sachs’ Lloyd Blankfein, Amazon’s Jeff Bezos and Microsoft’s Steve Ballmer have as well."
It is, of course, a subject that is very much top of mind this week with the Supreme Court hearing arguments in two different same-sex marriage cases. And it illustrates two things - the degree to which American mainstream opinion seems to have shifted on the issue, and the calculations that sometimes go into the taking of political positions by corporate executives.
- KC's View: