Politics and Business Don't Mix in Trump's America - Wall Street Journal
There’s a cereal killer on the loose.
Until recently it wasn’t necessarily a bad thing for a company to wear its political leanings on its sleeve. For example, executives at Costco and Starbucks arguably scored points with customers in recent years while openly supporting progressive causes. Privately held Hobby Lobby and Chick-fil-A have had great success even as their bosses have been outspoken conservatives.
But the recent backlash against Kellogg and other companies shows that political stances can come with costs. After the cereal maker joined other companies in pulling advertising from controversial right-wing website Breitbart over hate speech, the outlet launched a #DumpKelloggs campaign and wrote articles critical of the company.
There were similar calls by Donald Trump supporters to boycott Pepsi. Its chief executive, Indra Nooyi, made remarks about disrespectful talk toward women that some interpreted as critical of the president-elect. The flames were fanned by false reports that Ms. Nooyi told Trump supporters to take their business elsewhere. And department store Macy’s, which pulled Donald Trump branded merchandise in 2015 in an explicit protest against prejudice, has come under intermittent attack from Mr. Trump or his supporters.
One way to assess the damage to companies’ bottom lines is their stock prices since Mr. Trump’s surprise victory. Macy’s, for example, has lagged behind peer J.C. Penney by 16.5 percentage points and Kohl’s by 21.4 percentage points in the ensuing month. Kellogg shares have underperformed peers General Mills and Post Holdings by 4.4 and 11.5 points, respectively. Pepsi trailed Coca-Cola and Dr Pepper Snapple Group by a more modest 16 and 5 percentage points, respectively.
As American society becomes more divided it is becoming more dangerous to mix business and politics.
Write to Spencer Jakab at spencer.jakab@wsj.com
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