Starbucks’ open bathroom policy may be hurting foot traffic, new study finds

Starbucks' (SBUX) changes to its bathroom policy appear to be impacting foot traffic for the coffee giant, despite sales that have outpaced expectations, according to recent data.

Since opening its bathroom doors to the public in the wake of a controversial incident in Philadelphia, the coffee giant has seen a 6.8% drop in store attendance per month relative to other coffee shops nearby, according to the findings of a joint study from the University of Texas at Dallas and Boston College.

“When you throw open the policy to let people come in and just use the bathrooms and the tables, maybe people come in and find the bathrooms are dirty, and the tables are crowded,” David Solomon, Assistant Professor at Boston College Carroll School of Management, told YFi PM. “And so they don't buy the coffee as well.”

Photo: Reuters
A woman drinks a cup of coffee in Starbucks' Vigo Street branch in Mayfair, central London January 11, 2013. (Photo: REUTERS/Stefan Wermuth)

The study was based on anonymized location data related to 10,752 Starbucks stores from January 2017 to October 2018. The study collaborated with SafeGraph, a company that compiles anonymous smartphone location data and conducts algorithmic analysis.

“The results in our study highlight the difficulty companies can have when trying to engage in different forms of socially responsible behavior,” Solomon stated.

“Our team was very interested in what the economic consequences would be of an open bathroom policy as an example of providing a public good,” he added. “While the hope is always that providing public goods will be rewarded by the market with increased sales and new potential customers, this isn’t necessarily the case.”

Back in May 2018, Starbucks vowed to implement a “Third Place Policy,” meaning anyone could use the coffee chain’s facilities without having to make a purchase.

‘We see real customers’

The company disputed the study’s findings — and took a shot at its methodology.

“Customers are visiting Starbucks at record numbers,” a spokesperson told Yahoo Finance. “Rather than tracking cell phone data without user knowledge, we see real customers in our stores and the connections they make with our partners (employees) every day across more than 31,000 stores.”

Customers stand in line at a Starbucks Coffee shop on September 26, 2017. (Photo by Robert Nickelsberg/Getty Images)
Customers stand in line at a Starbucks Coffee shop on September 26, 2017. (Photo by Robert Nickelsberg/Getty Images)

Meanwhile, Solomon told Yahoo Finance that the study’s findings are not something that can be found in the company’s public disclosures “because you don't have the same comparison group of matched, nearby coffee shops to see what was going on,” he said.

Solomon added that customers are paying for more than just caffeine.

“What you're actually getting is a bundle of goods. You're getting the coffee, you're getting a pleasant table to sit at with your laptop, you're getting a bathroom to use when you need a break,” he pointed out.

McKenzie Stratigopoulos is a producer at Yahoo Finance. Follow her on Twitter: @mckenziestrat

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