The Reality of Starbucks After Months of Boycott: Did It Lie in Its Reports? (Debunking Starbucks’ False Claims)

The latest statements from Brian Niccol, the new CEO of the American coffee giant Starbucks, have shed light on the effectiveness of the boycott—a fact long asserted by anti-occupation and pro-Palestinian advocacy groups over the years.

Niccol, who assumed his position in August 2024 after replacing Laxman Narasimhan, acknowledged that the boycott’s negative impact extended beyond the Middle East, also affecting business in the United States. Narasimhan had failed to counter the massive sales decline Starbucks suffered since October 2023 due to the global boycott.

The Impact of the Boycott

The boycott, which gained traction across the Arab and Muslim world, began following widespread accusations against Starbucks for supporting Israel, which has been engaged in an ongoing campaign of genocide and siege against Gaza. Niccol, however, dismissed these allegations as “inaccurate and untrue.”

Since the onset of the aggression, Starbucks has reported revenues, profits, and growth rates lower than expected, alongside a noticeable decline in customer visits and order volumes, according to Yahoo Finance.

The boycott intensified when Starbucks filed a lawsuit against its own workers’ union, accusing them of supporting Palestine. The union had previously expressed solidarity with the Palestinian people, aligning with its principles of advocating for human rights and freedoms.

Former CEO Narasimhan admitted that the company faced a “challenging environment” and acknowledged the consumer pressure, particularly from occasional customers. This marks the first quarterly sales decline for Starbucks (Q1 2024) since 2020, when COVID-19 lockdowns disrupted the industry. The company’s Q2 revenue dropped by 2% year-over-year to $8.6 billion, while adjusted earnings per share fell by 8% to $0.68.

The latest figures revealed that Starbucks’ sales fell by 7% between July and September 2024 compared to the same period the previous year due to the boycott campaigns.

In its financial report for the last quarter (July 1 to September 29, 2024), Starbucks disclosed a drop in profits to $909.3 million, down from $1.21 billion the previous year. Sales in North America and the U.S. fell by 6%, while international markets experienced a 9% decline. Meanwhile, sales in China plummeted by 14%.

In late January 2025, Starbucks attempted to shift the narrative by announcing a “strategic return” campaign under the slogan “Reintroducing Starbucks to the World.” The company claimed to have achieved a net revenue of $9.4 billion in Q1 2025 (September 2024–January 2025), framing it as a “stable performance compared to last year.” Starbucks also highlighted a Q1 earnings per share of $0.69, attributing this to increased investments in the “Return to Starbucks” strategy.

Niccol commented on the company’s position, stating, “We have only completed one quarter of our transformation, but we are moving quickly in executing our ‘Return to Starbucks’ efforts and have seen positive responses.” He added, “We believe this strategic shift is necessary to resolve our core issues, restore trust in our brand, and return to sustainable long-term growth.”

Despite this optimistic spin, Starbucks shares had dropped to $71 in May 2024—the lowest since 2020—before recovering to $112 by mid-February 2025.

As part of its new plan, Starbucks announced its intention to open 500 new stores and create 5,000 jobs in the Middle East over the next five years—an increase of 40% over its current presence. Starbucks CFO Rachel Ruggeri stated, “The results of Q1 have encouraged us and demonstrated the effectiveness of our new strategy, which is evident in our revenue trends.” She acknowledged that while there is still much work to be done, Starbucks remains committed to shareholder value through dividend distributions.

A History of Boycotts

This is not the first time Starbucks has faced a major boycott. During Israel’s assault on Gaza in 2014, social media was flooded with calls to boycott the company due to its alleged support for Israel.

At the time, Starbucks issued a statement attempting to “clarify misconceptions,” claiming, “Starbucks does not support any political or religious causes… Neither Starbucks nor its then-CEO, Howard Schultz (who served as CEO from 1987–2017 and again from 2022–2023), provide financial support to the Israeli government or military.”

The company insisted that rumors about its financial ties to Israel were “completely false,” stating that as a publicly traded company, it would be obligated to disclose any such financial arrangements.

False Narratives

Despite Starbucks’ denials, Schultz was among 20 business leaders honored for “philanthropic and community service” at the 50th-anniversary celebration of the Israel Jerusalem Fund—an award given to those who have significantly contributed to Israel’s economy.

Following the start of the Gaza genocide, some U.S. media reports attempted to attribute Starbucks’ declining stock value to global coffee price hikes, which increased production costs.

While Starbucks cited inflation, climate change, and rising coffee prices as primary reasons for its sales drop, it placed the “ongoing Middle East conflict” at the bottom of its list of factors. However, many market analysts pointed to the boycott as the primary reason for the company’s financial struggles.

In a recent interview with Bloomberg, Niccol admitted that the Middle East boycott had significantly impacted Starbucks’ sales and revenue. The campaign received widespread support from consumers in the region, leading to a noticeable decline in sales and store traffic. Despite Starbucks’ attempts to downplay the situation, the financial and operational repercussions were undeniable.

Niccol acknowledged, “The boycott has severely harmed our sales, causing massive losses,” and pleaded with customers to end the boycott, warning that it could drive the company to complete collapse. He made this appeal during a visit to the UAE.

Starbucks in Israel

Starbucks first entered the Israeli market in September 2001 through a partnership with the Israeli energy company Delek, with ambitious plans to open 10 stores in the first year and expand to 80 stores within five years.

However, due to the outbreak of the Second Intifada, security concerns hindered its growth. Despite this, Israeli financial newspaper Globes reported that security issues were not the sole reason for Starbucks’ failure in Israel. In April 2002, the company began laying off employees and canceled plans to open a branch in Jerusalem. Unlike other café chains such as Aroma and Café Café, which successfully expanded, Starbucks struggled with marketing and management failures.

Other Companies Affected by the Boycott

On February 8, 2025, amid the ongoing boycott movement, Yum! Brands—the U.S. company that owns KFC and Pizza Hut—terminated its franchise agreement with Turkey-based operator Esh Gıda, leading to the closure of 537 outlets and the operator’s bankruptcy, with debts exceeding 7.7 billion Turkish liras ($214 million).

According to Turkish media, KFC sales in Turkey had plummeted by 40% in recent months, exacerbating the franchise’s financial crisis.

Meanwhile, the Boycott, Divestment, and Sanctions (BDS) movement reported that McDonald’s had suffered losses exceeding $7 billion due to the global boycott. BDS asserted that these financial consequences prove that corporations complicit in Israeli war crimes will pay a heavy price.

The movement hailed the success of boycott efforts in Oman, where Carrefour announced the closure of its operations on January 7, 2025, following sustained pressure. BDS encouraged continued boycotts of all Carrefour-affiliated stores until the company ends its partnership with its French parent company, which has been accused of complicity in Israeli crimes.

The movement concluded, “Let this success inspire us to make other complicit corporations pay the price for supporting Israel’s atrocities against Palestinians.”