After nearly 15 years of operating its stores in Russia, Starbucks will exit the market, joining companies such as McDonald’s, ExxonMobil and British American Tobacco in withdrawing from the country entirely. Read more [Dutch Company Prosus Sells Avito Store in Russia] and [Zurich Insurance Company Graduated from Russia].
The coffee beverage giant announced that its brand no longer has a presence in Russia, and Starbucks has 130 locations in the country, but it represents less than 1% of annual revenue for the company, and all of those stores are considered licensed, meaning that the Seattle-based company does not Manage it directly.
Starbucks said it will pay its 2,000 Russian workers for 6 months and help them relocate and seek new opportunities outside the coffee chain’s business.
Both consumers and investors pressured Western companies such as Starbucks to reduce their dealings with Russia in order to show their rejection of the Kremlin’s war with Ukraine, but the termination of licensing contracts takes time, knowing that Starbucks has suspended all its business activities in the country since March 8, and the suspension included shipments of all Starbucks products and the temporary closure of coffee stores. Read more [+400 Companies Have Withdrawn From Russia and Some Are Stuck].
In the company’s latest results report published in early May, the company did not disclose the financial damage of stopping its business there, but it was certainly less than the financial blow suffered by McDonald’s, which has operated in Russia for more than 30 years. To read more [Starbucks Aspirations Halted as Lockdown Continues in China].
The fast-food chain says that closing its massive businesses in Russia and Ukraine cost it $127 million in the first quarter, and the two markets represent about 9% of its revenue in 2021. Read more [Closing McDonald’s Restaurants in Russia Causes Huge Losses].