The store closures Starbucks Inc. announced Tuesday for racial-bias employee training will cost the company about $12 million in lost revenue, according to MarketWatch calculations.
Factoring in the company’s $22.39 billion in annual sales, and dividing it by the number of days in the year suggests that Starbucks banks about $61.3 million every day. But since according to the announcement, Starbucks locations will close only for part of the afternoon, MarketWatch calculated that locations would lose about 20% of their daily revenue, or $12 million.
Starbucks said that it is closing about 8,000 U.S. locations for the racial-bias training. As of the fourth fiscal quarter, Starbucks operated 13,275 stores worldwide and licenses another 14,064, including 5,708 in the U.S.
This isn’t the first time Starbucks has closed its doors for training. When Starbucks shuts its doors for an afternoon next month, it will have been a decade, three months and three days since the last time it took such an action.
That 2008 shutdown, then-CEO Howard Schultz recalled in his 2011 book, cost the company about $6 million. “Ultimately,” Schultz wrote, according to a Business Insider excerpt, “closing our stores was most powerful in its symbolism. It was a galvanizing event.” The company operated about 7,100 stores in 2008.
The planned May 29 closure of all U.S. locations comes in the wake of a reputation-threatening incident last week at a store in Philadelphia, where two black men were forcibly removed as they reportedly waited for a third man with whom they had a meeting scheduled. A Starbucks store manager had called in a trespassing complaint. The coffee company blamed flaws in its “community culture” that it now intends to address during the May all-employee event.
While 2008’s three-hour closure was aimed at a more quotidian outcome — reorienting employees toward perfecting “the art of espresso” — the language employed Tuesday by Starbucks
was not so dissimilar to what the company said then.
‘This is not about training. This is about the love and compassion and commitment that we all need to have for the customer.’
In its statement Tuesday, the Seattle-based company suggested it believes racial profiling in commercial settings extends beyond its thousands of U.S. stores but that it intended to enact change where it could. “The company’s founding values are based on humanity and inclusion,” Schultz, now executive chairman, said in the statement. “We will learn from our mistakes and reaffirm our commitment to creating a safe and welcoming environment for every customer.”