Starbucks will leave Russia after 15 years in business, joining firms such as McDonald’s, Exxon Mobil, and British American Tobacco in exiting the country completely.
The coffee giant declared that it will no longer have a presence in Russia. Starbucks has 130 outlets around the country, accounting for less than 1% of its yearly revenue. The Seattle-based corporation does not operate any of the outlets because they are all licensed.
Starbucks has announced that it will pay roughly 2,000 Russian employees for six months and assist them in finding new jobs outside of the company.
Consumers and investors have pressed Western corporations like Starbucks to terminate connections with Russia in protest of the Kremlin’s war in Ukraine, but licensing agreements take time to unwind. Since March 8, Starbucks has ceased all operations in the country. All Starbucks goods were briefly halted, and locations were temporarily closed.
The financial impact of the suspension of commercial operations was not disclosed in the company’s most recent quarterly results, which were announced in early May. Kevin Johnson, the company’s former CEO, promised to give royalties from the Russian business to humanitarian purposes.
However, it was undoubtedly a smaller financial setback than the one suffered by McDonald’s, which has been in Russia for almost 30 years.
McDonald’s to exit Russia after 30 years amid Ukraine war
The suspension of its large Russian and Ukrainian operations cost the fast-food giant $127 million in the first quarter. In 2021, the two markets accounted for 9% of the company’s sales. In Russia, the company had about 850 restaurants, the majority of which were run by the corporation rather than licensees.
McDonald’s stated on Thursday that it will sell those stores to a Siberian franchisee for an undisclosed fee and that they would be rebranded.
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