LGBTQ+ Pride Month is a month, typically June, dedicated to the celebration and commemoration of lesbian, gay, bisexual, transgender and queer pride. Even before Pride month began, companies celebrating the LGBTQ+ community have become targets of criticism and boycotts.
Several well-known brands, including Anheuser-Busch, Target, Kohl’s and VF Corporation’s North Face brand, have faced the wrath of conservative critics branding them as “woke capitalists.”
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The controversy surrounds partnerships with trans influencers, featuring drag queens in advertisements and selling Pride-themed clothing.
The ongoing attacks have already impacted the stocks of these companies, with analysts downgrading ratings for Target and Anheuser-Busch due to the controversy.
Boycotts threaten company reputations
Boycotts can be effective because they tarnish a company’s reputation by drawing negative media attention. Research has shown that stock prices can decline about 1% each day during national print media coverage of a boycott.
Companies often concede to the demands of boycotters to avoid further negative attention. However, stocks generally recover once the issue fades from the news cycle.
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By GlobalDataBud Light’s sales hit hard
Anheuser-Busch’s Bud Light brand has been particularly affected by the controversy, experiencing an 18% drop in stock value over two months. The backlash has been fierce, with rival brands Miller Lite and Coors Light gaining market share while Bud Light’s share declined.
The boycott’s impact on beer sales is unique due to factors such as the removal of the product by establishments and the social nature of drinking. Despite offering a rebate programme to win back customers, Bud Light’s sales have suffered and the boycott continues.
Companies on edge and facing risks
The situation with Bud Light has put other companies on edge. Target, which has carried Pride-themed apparel for years, faced pushback this year and decided to move or remove the products from stores, citing concerns for worker safety.
However, this decision has risks, as it may offend both sides of the issue. GLAAD, an LGBTQ+ media advocacy group, has called for Target to restore the Pride merchandise and ensure worker protection.
Bomb threats have also been reported from individuals claiming to support the LGBTQ+ community. Target’s stock has fallen by 10% since the controversy emerged.
Impacts on VF Corp. and Kohl’s
VF Corporation, the parent company of North Face, saw its stock drop by approximately 9% after launching its “Summer of Pride” advert.
However, it showed signs of recovery on Friday. Kohl’s shares also rebounded by nearly 12% after experiencing a decline. Analysts downgraded Target’s stock, citing weakening consumer sentiment and the recent controversies as contributing factors.
Companies struggle to navigate social issues
Despite the risks involved, companies continue to tie their brands to social issues to establish deeper connections with customers. Aligning with purpose and social causes can foster powerful relationships with consumers.
However, as recent events have shown, companies may need to become more cautious in how they communicate their values externally, even if they continue to embrace them internally.
While boycotts may initially impact sales, strong customer relationships often mitigate longer-term effects.
