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Starbucks: Outrage over in-store arrests has not hurt sales

The chain’s CEO says he is committed to preventing further racial-bias incidents with changes to processes, training and culture.

Widespread protests and outrage following the arrests of two African-American men in a Philadelphia Starbucks earlier this month have not impacted sales at the coffee chain, executives revealed Thursday.

“I acknowledge it’s still early, but we are not seeing an impact on comp sales as a result of Philadelphia,” Starbucks CEO Kevin Johnson said during the chain’s Q2 earnings call.

Days after video of the arrests went viral, Starbucks officials announced they would close more than 8,000 units on the afternoon of May 29 for racial-bias training for all employees.

“I am personally committed on a number of fronts to ensure that it never happens again,” Johnson said during the call. “All companies make mistakes. Great companies learn from them and improve. And that’s exactly what we intend to do.”

The company is still assessing the impact the half-day closure will have on the chain’s finances, Johnson said, noting that “The one thing I do know for sure is that our approach to this will pay long-term dividends for Starbucks.”

However, at least one expert says the closure won’t be enough to close the gap. The half-day training is a solid first step, but the chain must follow up with ongoing training, says Gerry Fernandez, president of the Multicultural Foodservice & Hospitality Alliance. The MFHA provides racial-bias training, and Fernandez says he has seen an uptick in inquiries since the Starbucks incident.

“The data says there needs to be other things that make these efforts stick,” he says.

Companies need to look at their policies surrounding conflict escalation and bathroom use, for example, and they also need to target recruitment of under-represented groups for hiring, he says. Training that involves practicing scenarios of potential conflict is particularly worthwhile.

“The initial training has to become part of ongoing training,” he says. “It’s like food safety … it’s like fire drills. The reason people practice is so they’ll know what to do when something happens.”

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