Chick-fil-A dilemma: Uphold principles – or just sell chicken? (+video)
Chick-fil-A president's public criticism of gay marriage have sparked a firestorm that could cut into the fast-food chain's profits. Boston's mayor and a Chicago alderman have vowed to fight the opening of Chick-fil-A restaurants in their cities.
A week after Chick-fil-A President Dan Cathy’s comments on marriage created a firestorm, the Atlanta company finds itself grappling with a public relations snarl that some experts say could affect its bottom line.
Restaurant and branding experts say the chain could lose millions if customers begin associating the company with polarizing political issues instead of food.
At the same time, fallout continues to be mixed, with online petitions both for and against Cathy’s stand on traditional marriage — widely interpreted as a slap at supporters of gay marriage — drawing thousands of signatures. Gay and lesbian groups have called for protests at a store opening next week in California and want same-sex couples to kiss at Chick-fil-A locations on National Same-Sex Kiss Day next week.
Former Arkansas governor-turned-TV host Mike Huckabee has declared next Wednesday National Chick-fil-A Appreciation Day, in support of Cathy.
Marketing experts said they are surprised a company so adept at honing its brand could stumble into the political thicket.
“Most brands try to steer away from political stands because they are so polarizing,” said Tim Calkins, a clinical professor of marketing at the Kellogg School of Management at Northwestern University.
Said Rupert Barkoff, a partner and food industry expert for Kilpatrick Townsend: “When you bring politics into business, the worlds collide and the consequences can be unpredictable.”
Privately held Chick-fil-A, which rakes in about $4 billion a year, could see as much as a 1 percent to 2 percent drop in sales if the controversy lasts a month or two, said Peter Saleh, director and senior restaurant analyst for the Telsey Advisory Group.
But Saleh added, “We’ve seen other PR nightmares or PR issues with companies and they will bounce back. It will just take some time. Maybe a couple of quarters.”
Chick-fil-A declined to comment for this report. The chain has stood by its initial statement that its goal is “to treat every person with honor, dignity and respect — regardless of their belief, race, creed, sexual orientation or gender. … Going forward, our intent is to leave the policy debate over same-sex marriage to the government and political arena.”
The comment sparking the uproar came when Cathy told an interviewer from a religious publication that he supports “the biblical definition of the family unit,” which many, especially those in the gay community, regard as opposing gay marriage. Harder-edged remarks he made on a radio show in June also have circulated.
Greg Sanders, publisher of North Carolina-based Food News Media group, said the debate could stunt the company’s growth in areas outside of the Southeast.
“Chick-fil-A is part of the South. It’s part of the Southern culture, and they’ve done an outstanding job of expanding over the years,” Sanders said. “But let’s be frank: If they’re new in California, not only are social attitudes possibly different in that part of the country, but there’s also not a bank of goodwill with that brand being built for up years (as it is) in the South.”
Since Cathy’s remarks surfaced, Boston Mayor Thomas Menino and Proco “Joe” Moreno, a Chicago alderman, have promised to block the chain’s efforts to build more stores in their cities. Muppets creator Jim Henson’s company last week severed a toy deal it recently launched with Chick-fil-A, although reports on Wednesday said Chick-fil-A told customers the toys were being dropped because of unspecified “defects.”
Mark Pettit, president & chief executive officer of Creaxion, an Atlanta marketing firm that has a specialty in crisis management, said Cathy’s candor was bad business.
“Mr. Cathy needs to understand that while his company is privately held, his brand is publicly owned,” Pettit said. “Thousands of gay people work and eat at Chick-fil-A every day — many of them with a bit of shame knowing they love the company but don’t like what senior executives apparently stand for. Mr. Cathy needs to address the situation head-on and let all customers know they are welcome at Chick-fil-A.”
The scope of the controversy is somewhat uncharted territory for Chick-fil-A.
The company has long said it operated on biblical principles and is well-known for staying closed on Sundays, a stance that has won admiration from some. But experts said it never hit diners over the head with beliefs.
Still, this is not the first time the chain has butted heads with gay rights organizations. They have complained about donations the company and franchisees have made to Pennsylvania Family Institute, Focus on the Family and the National Organization for Marriage, all groups that oppose gay marriage.
At that time, Cathy told The Atlanta Journal-Constitution he felt discussion of the issue was a “really great thing” for the company.
Sanders said controversies can yield surprising results. He pointed to a Texas-based pizza chain, Pizza Patron, that launched a “pizza for pesos” promotion in the late 2000s, igniting a media storm during a time that illegal immigration was, and remains, a hot issue.
“There was quite a bit of fallout . They took heavy criticism,” Sanders said. “But here’s the thing: Their sales increased.”
WHAT HE SAID:
—What Chick-fil-A President Dan Cathy said to Biblical Reporter, published July 2, when asked about the company’s support for traditional marriage and opposition to gay marriage: “Well, guilty as charged. We are very much supportive of the family – the biblical definition of the family unit. We are a family-owned business, a family-led business, and we are married to our first wives. We give God thanks for that. We operate as a family business … our restaurants are typically led by families — some are single. We want to do anything we possibly can to strengthen families. We are very much committed to that. … We intend to stay the course. We know that it might not be popular with everyone, but thank the Lord, we live in a country where we can share our values and operate on biblical principles.”
—On the Ken Coleman radio program June 16: “As it relates to society in general, I think we are inviting God’s judgment on our nation when we shake our fist at him and say, ‘We know better than you as to what constitutes a marriage.’ I pray God’s mercy on our generation that has such a prideful, arrogant attitude to think that we would have the audacity to try to redefine what marriage is all about.”