By Khaled Itani | Staff Writer
In the ever-evolving landscape of consumer activism, the power of public sentiment has never been more evident than in the phenomenon of boycotting. It is a form of organized and deliberate abstention or withdrawal from supporting or engaging with an organization or product as a means of expressing objection to certain actions and decisions associated with the target. This article delves into the intricate relationship between consumer-led boycotts and their impact on the stocks of some of the world’s leading companies. By taking a closer look at the current Gaza-Israel conflict, the aim is to shed light on the dynamics that govern the intersection of consumer-led behavior (boycotting) of a large number of companies and brands that support Israel, which lead to a significant decrease in the stock prices of major companies like Starbucks. The Boycott, Divestment, Sanctions (BDS) is a Palestinian-led movement seeking to “challenge international support for Israeli apartheid and settler-colonialism”, and it made important strides in that matter.
While tensions are rising and the war is waging between Hamas and Israel, oil prices have seen no significant changes. Why? A main reason, analysts say, is that the fighting, no matter how vicious, has produced little disruption to petroleum supplies, leading traders to conclude that there is no immediate threat. “While traders realize there is an increased risk, that hasn’t led to a lot of precautionary buying,” said Richard Bronze, head of geopolitics at Energy Aspects, a London-based market research firm. The oil market appears to have disregarded the impact of the war, shifting to a pessimistic outlook regarding the future demand for petroleum.
With over 150 corporations expressing their support and solidarity with Israel, including top companies like Starbucks, Goldman Sachs, and J.P Morgan Chase, protestors started boycotting these companies, due to their lack of sympathy for the suffering of Palestinians. As a result, these businesses saw a large drop in their value.
Long under fire for their support of Israel, Starbucks Corporation is now receiving heavy backlash from furious boycotters. These boycotts, which began mid-October, have affected Starbucks’ market value, which has seen a decrease for 12 consecutive days, according to the Wall Street Journal, accruing an estimated $11 billion in lost market value and encouraging speculation regarding the role of the boycotts. Its stock price decreased by a total of 38 basis points ($20) since the start of the conflict, which illustrates the effect the boycott has had on major corporations.
The BDS movement has also been waging its own battle with Israel. This battle, however, takes the form of boycotting and educating people around the world on the ongoing struggle and devastation in Gaza. They offer guidance on what their aim is and which products to boycott in order to reach their goal of imposing financial stress on the Israeli government. This resulted in a massive surge in the support of local products, boosting their own country’s economies and aiding in the flourishing of these local companies and products. For example, Stories Café, a well-known coffee shop that is a Lebanese alternative to Starbucks, has risen to fame with a large number of Lebanese people now frequenting its branches. Also, a lot of employees who used to work at Starbucks branches were hired by Stories, further assisting their business. This movement didn’t stop at organizing protests and applying pressure on Israel, as it also played a part in convincing well-known companies and corporations like Ben and Jerry’s to stop selling in Israel and withdraw any support they had for them, which highlights important strides the movement has made in propagating awareness surrounding the occupation.
In conclusion, the intricate relationship between consumer-led boycotts and their impact on global companies, as demonstrated in the context of the Gaza-Israel conflict, showcases the growing influence of public sentiment in shaping corporate behavior. The BDS movement, in particular, has emerged as a powerful force advocating for change and expressing objection to certain actions. The financial repercussions faced by major corporations, such as Starbucks, illustrate the tangible consequences of consumer activism. Moreover, the ripple effect extends beyond financial losses, contributing to a surge in demand for local products and businesses, demonstrating the potential economic shifts that can arise from collective consumer choices. As the dynamics between activism, corporate actions, and financial markets continue to evolve, this case study serves as a noteworthy example of how public sentiment can drive change and reshape the business world.
Sources:
https://www.nytimes.com/2023/11/09/business/energy-environment/oil-price-israel-gaza.html
https://www.wsj.com/market-data/quotes/SBUX/historical-prices