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Boycott Backlash

By Scott Orr

Last summer, Chick-fil-A president Dan Cathy merged his politics and his business interests when he told the world that he and his company support "the biblical definition of the family unit."

Cathy's remarks set off a firestorm of protest that included calls for a boycott of the company's restaurants and their beloved chicken sandwiches. Politicians from Boston to San Francisco issued statements condemning the company as anti-gay. This, of course, prompted blowback from religious conservatives who rallied in defense of Chick-fil-A.

But Cathy's remarks did more than ignite a national debate over same-sex marriage, they also served-up a supersized demonstration of what can happen when words are exchanged at the intersection of politics and commerce.

For retailers, the Chick-fil-A episode is a cautionary tale, one that raises serious questions about how public opinion can influence a business's bottom line. Cathy's position on social issues and the reaction from those who disagreed with him are largely beside the point. For businesses, the bottom line is that mixing politics and business can yield a volatile brew, one that should be consumed with caution and ample forethought.

Avoid the Hot Button
Sometimes, public animosity toward a retail business can be stirred even without the catalyst of political or social issues. High prices, environmental accidents, animal rights, labor issues, foreign affairs, race and gender fairness, treatment of foreign workers, even the perception of rudeness have led to public condemnation for American businesses over the years.

"Owning a business in this country certainly does not mean surrendering your right to free speech and your ability to participate in the political system. Still, it makes sense to give serious consideration to how you, as a business owner, will be perceived by customers before drawing lines in the sand on political or social issues," said Lyle Beckwith, senior vice president of government relations at NACS.

"And awareness is key. If you know your neighborhood, your customers, your community, you have a much better chance of avoiding the pitfalls that have left some business people scratching their heads and asking themselves 'Where did I go wrong?'" he said.

Strong community relations are extremely helpful, though not immunizing, against the vagaries of public opinion. And take heart, when public opinion turns on a business, the results are usually short-lived and rarely lethal.

Fred Taub, who heads the Cleveland-based Boycott Watch and consults for businesses on boycott prevention and crisis management, says boycotts rarely succeed and tend to blow over quickly. While he doesn't discourage political activism by businesspeople, he certainly advises against taking strong public stands on hot-button issues.

"As a businessperson, when you get involved in the hot-button political or social issues, you run the risk of alienating half of your customers. You may please half the people, but in the long run it's not a good business strategy," Taub said.

Involvement in local politics and weighing in on significant local causes can be ways for small businesses to demonstrate civic involvement and to enhance their profiles in the community.

"Businesses usually look good supporting the local school or teacher initiatives and especially sponsoring youth sports...The team photo on the wall, with or without a trophy, is good for business. It says the company supports the community while avoiding controversy at the same time," Taub wrote on his website boycottwatch.org.

When boycotts are organized, Taub said, they often target corporations or brands, but can have collateral impact on small businesses and their employees. So, for example, when a particular brand of gasoline is targeted for a boycott for one reason or another, it is the station owners, not the oil companies, that feel the pinch.

"A boycott of a gas brand will hurt the people who work at the local store and nobody else," he said.

A Positive Thing?
Most often, boycott threats harm no one. And, in some cases, they have actually been good for business.

Last year, for example, Wisconsin-based Kwik Trip convenience stores were added to a list of companies threatened with boycotts by public employee unions that were seeking to recall Governor Scott Walker. Walker angered the unions by proposing changes to the collective bargaining agreement for state workers.

The unions said Kwik Trip and as many as 100 other businesses in the state were targeted because they, or their executives, backed Walker directly, they were members of a pro-business group that supported Walker, or they refused to support the recall.

Walker easily survived a recall vote in June and Kwik Trip, likewise, survived the boycott threat. In fact, Kwik Trip, a family-owned convenience and gasoline station chain, may have actually benefitted from the boycott effort as backers of Walker's brand of fiscal austerity rallied in support of the business.

Special Interest Platforms
Boycotts have been around in this country since colonial times when one of history's best-known boycott initiatives took place: The Boston Tea Party, which protested high taxes and hastened the Revolutionary War.

Today, most boycotts are more about getting attention for special interests than they are about forcing businesses to change their practices or policies. Boycotts have been called in recent years against Starbucks for its treatment of Ethiopian coffee farmers, cosmetic companies that use animal testing, Kellogg Company for using genetically engineered sugar beets and many, many others.

Sometimes, corporations set policies knowing full well they will anger certain segments of the population. Such was the case when Starbucks, Nike, Microsoft and other companies announced their support for legislation to legalize same-sex marriage in Washington State earlier this year.

Predictably, the National Organization for Marriage (NOM), a Christian group that opposes same-sex marriage, called for a boycott. The group got a small amount of press, but little came of it.

Jonathan Baker, director of NOM's Corporate Fairness Project, said his group called the boycott as a way to give voice to those who disagree with the corporate policies. He noted that, unlike in the case of Chick-fil-A, the support for the Washington same-sex marriage initiative was articulated as corporate policy, not as a statement from the company president.

"Obviously this position does not reflect the views of all customers and employees and the NOM protest...is designed to enable these customers and employees to have a voice," Baker said.

Caught in the Crossfire
While boycotts can have impacts, their corporate targets are rarely the ones harmed.

Back in 2010, for example, Public Citizen, the consumer-advocacy group founded by Ralph Nader, and others called for a boycott of BP gasoline to punish the British Petroleum giant for the disastrous oil spill in the Gulf of Mexico.

Lost on those who joined that boycott: the fact that avoiding BP gas stations and the convenience stores they are connected to does nothing to harm BP, which is not in the retail gasoline business. It does, however, harm local businesspeople and their employees.

At the time, Jeff Miller, president of Norfolk-based Miller Oil Co. Inc. and former NACS chairman, said that he understood the public anger directed at BP, but not the shrill voices calling for boycotts of local businesses. Miller Oil Co. owns 16 BP stations and supplies BP gas to nearly 50 small operators.

"Basically, we were caught in the crossfire," Miller said. "[Consumers] want to vent their frustration. They want to vent their anger," he said.

Jay Ricker, chairman of Ricker Oil, which has some 50 Ricker's convenience stores and BP gas stations in Indiana, told the Wall Street Journal that sales fell 5.4% in the weeks after the accident. BP retailers in other states reported declines of as much as 10%.

Similarly, consumers from time to time suggest boycotting all gasoline stations for a day to protest high prices at the pump. Again, such boycotts typically make little impression on big oil companies, but could hurt businesses if they were to succeed. These kinds of boycotts are better at generating headlines than they are at keeping away customers.

On the Home Front
Sometimes, businesses can find themselves embroiled in more locally based controversy. Last year, African-American leaders in Dallas called for a boycott of a local Diamond Shamrock store after a dispute between a single customer and the store's owner.

What started as a dispute over the store's policy requiring a $5 minimum on debit or credit card purchases, escalated as local civil rights leaders, clergy and others charged the store owner, who is Asian, with racism. Soon, the local media was on the scene and the business suffered short-term losses.

Then there's the convenience store in Woonsocket, Rhode Island, that faced a boycott last year organized by a local high school where teachers, administrators and students objected to the sale of tobacco products and smoking products so close to school grounds.

In California, the United Food and Commercial Workers called for a boycott of San Jose-based grocery store Mi Pueblo, after it joined a federal program designed to verify the immigration status of employees. The store said the boycott had more to do with efforts to unionize its workers than with its immigration verification program.

Of course, anyone can call for a boycott and it has never been easier with the help of social media — another reason to keep close tabs on what people are saying about you online. In the vast majority of cases, these online boycott calls fail to gain traction and are usually best ignored.

On Facebook recently there were calls for boycotting the Red Eye Dock Bar in Grasonville, Maryland, because it supports the Pittsburgh Steelers instead of the Baltimore Ravens; Petco in Johnson City, New York, because a number of animals drowned there during a 2011 flood; and Hobby Lobby because it is suing the U.S. government over the health-care contraception mandate.

But just because someone has created a Facebook page naming your business as a target means little. It takes a rare perfect storm of issues and publicity for public opinion to have a serious impact on a business's bottom line.

Avoiding harm requires a combination of solid community relations, keen awareness of customer mood and a thoughtful approach to political issues. On this, Beckwith and Taub agree: Political activism is okay as long as it's tempered by good business sense.

Scott Orr is a freelance writer based in Washington, D.C.