In April 2018, a Starbucks store manager in Philadelphia called the police on two Black men who were sitting in the store waiting for a friend without having ordered anything. The men were arrested, and a bystander's video of the incident went viral, sparking protests and a national conversation about racial bias in public spaces.
Starbucks CEO Kevin Johnson flew to Philadelphia to apologize personally. The company announced it would close over 8,000 US stores for an afternoon of racial bias training, at an estimated cost of $12-16 million in lost revenue. The two men received a settlement and a $200,000 grant for young entrepreneurs.
The case illustrated how a single employee's decision — calling the police on customers who had done nothing wrong — can become a brand-defining crisis, and how the cost of the response (8,000 stores closed) can far exceed the cost of the training that might have prevented it. It also raised broader questions about who is considered a 'customer' in a public-facing business.
Closed 8,000 stores for a half-day of bias training, costing $12-16M in lost revenue, to address the systemic bias that led to the arrests.
A store manager called police on two Black men who were waiting without ordering, reflecting racial bias.
The arrest video went viral, sparking protests and a national conversation about racial bias.
Starbucks closed 8,000+ stores for bias training, at an estimated $12-16M in lost revenue.
The case raised questions about who is considered a 'customer' in a public-facing business.
Brand values are only as strong as the least-trained employee in the least-supervised store. One manager's bias closed 8,000 stores. The $16M training day was the bill for years of not training.
Starbucks implemented ongoing bias training and revised its store policies to clarify that anyone can sit in its stores without purchasing. The case became a reference point for discussions about racial bias in retail and public accommodations.
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