Marcus Leroux
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Starbucks has lost more ethical customers than rival coffee shop and fast-food companies after environmental and sourcing controversies damaged its reputation, a survey for The Times shows.
The ubiquitous coffee chain enjoyed decades of uninterrupted growth until this summer when it decided to close nearly 700 stores in the United States, Australia and Britain.
Now, the latest concerned consumer survey, carried out for The Times by Populus, shows it has also lost the most support among green and ethically aware shoppers.
Consumers were asked what they thought about the general behaviour of fast food outlets and coffee shops. Starbucks' ethical track record was rated worse than any chains except McDonald's, Burger King and KFC, and it was the biggest faller in the index. Its average rating fell by 7 points to 42 out of a possible 100.
It was heavily criticised by environmentalists last month for running its taps constantly to keep utensils clean. The policy was then changed.
Starbucks has also been under attack for blocking an application by Ethiopia to trademark its coffee, which Oxfam said denied the country £47 million a year.
The company reached an agreement with Ethiopia last year on the dispute and this week announced that it had become the world's largest purchaser of Fairtrade coffee. The Fairtrade Foundation said that the move would boost its suppliers in the Third World.
In London, Howard Schultz, the founder and chief executive of Starbucks, told The Times: “We believe very strongly that the consumer here and in the United States wants to promote a company whose values are similar to their own. Even in a downturn like the one we're in, they want to be supportive of a company which will sit with their beliefs.”
Focusing on the ethical performance of coffee chains, the survey revealed that the number of customers who thought that coffee shops were doing enough to tackle social and environmental issues dropped by four percentage points in a year to 36 per cent, while the figure for fast food chains increased six percentage points to 16 per cent. The survey also suggested that the fast food industry's drive to appear healthier is finally bearing fruit. Big operators have been offering more salads and cutting salt and trans fats from menus for at least two years.
As part of that trend, Pizza Hut rebranded itself Pasta Hut in September in an attempt to woo new customers. Subway's focus on fresh food “made in front of you” wins it a place as the concerned consumer's favourite fast food restaurant, even beating competition from the coffee shops.
David Lourie, an analyst at Good Business, the ethical consultancy, said: “Fast food companies' sales focus has been on health food for the last year. They have been focusing on fresh products. That's all led to a shift in consumers' view of what fast food is about. We're moving beyond burger and chips.”
But he added: “It's a difficult message to get across for people like McDonald's and Burger King.”
As the financial crisis has spread to the real economy, the concerned consumer index has shown a marked decline in how highly customers prioritise a company's ethical track record when making a purchase.
As recently as February, nearly 70 per cent of ethically aware consumers said they would still try to buy the most ethical and environmentally friendly products even at a little extra cost. This month, that figure had dropped to 60 per cent.
Meanwhile, the number of consumers who say that they will buy the best-value products regardless of the company's environmental or ethical credentials has risen from 35 per cent to 40 per cent over the year. Similarly, price is becoming an increasingly important issue for customers.
The significance that consumers attach to ethical issues in a purchasing decision has slipped below price in the past year, as nervous shoppers have cut spending. As the slowdown has set in, concerned consumers have become increasingly price-conscious and marginally less concerned about the treatment of suppliers and the working conditions of employees, according to the findings.
Mr Lourie said: “It's not that consumers have stopped caring, it's just that they have got other things that are higher up the scale. If a company can convince consumers they can stick to their values during the hard times, they will stick with them when they come out the other side of the recession.”
Despite the subtle shifts in priorities, concerned consumers remain significantly more sensitive to environmental and social concerns.
They are 25 per cent more likely to agree that customers should be prepared to pay extra to ensure companies retain social and environmental initiatives in a downturn, and 13 per cent more likely to have a higher opinion of a company that continued to spend money on such initiatives when economic conditions become tough.
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