Should You Be Worried About the Starbucks Corporation (SBUX) “Toilet Water” Scandal?

It will take a few months to see for sure whether this apology will be sufficient to win back the trust of Chinese Starbucks Corporation (NASDAQ:SBUX) customers. However, it’s encouraging that Starbucks relatively quickly admitted fault. As long as none of its other locations turn out to have similar water arrangements, Starbucks has a good chance of recovering quickly from this slip-up.

Foolish takeaway
Starbucks is in the midst of a major growth campaign in China and hopes to double the number of cafes it operates in the country to 1,500 by the end of 2015. If a significant number of people stay away from Starbucks after the “toilet water” scandal, it will severely crimp these expansion plans.

However, Starbucks Corporation (NASDAQ:SBUX) did the right thing by immediately changing its water source and then apologizing for failing to meet its own high quality standards. Ultimately, this incident is more likely to be an unfortunate blip rather than a game-changer that destroys Starbucks’ reputation in China. Starbucks shareholders should be attentive to any long-term fallout, but for now it looks like the coast is clear for Starbucks to maintain its growth trajectory in China.

The article Should You Be Worried About the Starbucks “Toilet Water” Scandal? originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Starbucks.

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