Why Starbucks is the grinch who stole Christmas
marketingmagazine.co.uk, Wednesday, 05 December 2012 12:00AM
The thorny issue of tax avoidance is not going to go away and, in these times of ultra-transparent business, brands that engage in the practice have nowhere to hide, writes Nicola Kemp.
Like the Grinch who stole Christmas, the Starbucks tax-avoidance debacle has taken the shine off the arrival of its annual 'Christmas cups'.
With ongoing media coverage urging consumers to wake up and smell the tax-avoidance, that festive gingerbread latte I'd been craving since late August has lost its allure.
The coffee retailer, which is attempting to defuse the mounting row about the amount of tax it pays in the UK by pledging to pay more corporation tax gave evidence to the Commons Public Accounts Committee last month. Alongside Amazon and Google the coffee giant has faced an avalanche of negative press. Now, campaigning group UK Uncut has pledged to occupy Starbucks stores, turning them into impromptu creches, refuges and homeless shelters to highlight the chain's tactics.
As a brand that has a sold itself on its ethics and promoted its Fairtrade credentials, Starbucks is now in an embarrassing position, which has sparked a barrage of negative tweets.
It has never been easier for consumers to declare their disgust at brands' behaviour, but there is a big difference between 'slacktivists' tweeting their opinion and acting on that opinion by boycotting a product. Nonetheless, the thorny issue of tax-avoidance has presented consumers with a headache.
With the UK high street littered with retailers that have bitten the dust this year, protecting British business is at the top of the political agenda. Andy Street, managing director of John Lewis, recently declared that multinational companies trading in the UK but deploying overseas tax havens will 'out-invest and ultimately out-trade businesses paying full taxes in the UK'.
We are all happy to boycott things we don't miss; under this logic, I have successfully boycotted Tesco for decades. When it comes to breaking our habits and actually inconveniencing ourselves, however, it is a different story.
Wouldn't it all just be easier if we could simply rely on brands to do the right thing?
What brands need to know about ultra-transparency
The return of fair play
The concept of corporate social responsibility extends well beyond some slap-dash green-washing. Brands must ensure that they reflect their values in everything they do, from how they treat their employees to how they conduct their tax affairs.
Reputation is everything
In Velocity: The Seven New Laws for a World Gone Digital, Ajaz Ahmed writes: 'In an age where transparency is the norm, what matters perhaps more than your wealth is your reputation. In an era of collaborative consumption, where we are increasingly sharing, it is more important to be trustworthy than rich.'
Beware of the boycott
Brands should not underestimate the potential impact of a consumer boycott. According to data from the Harvard Business Review, Greenpeace's call for boycott of Shell in 1995 reduced sales in Germany by up to 40%.
Consumers have increasingly polarised views of brands: they are either on their side or against them. At a time when consumers' disposable income is shrinking, there is no room for corporate misbehaviour.
Nicola Kemp is Marketing's head of features. Follow her on Twitter: @nickykc
This article was first published on marketingmagazine.co.uk
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