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Starbucks Exits Russia as It Moves to Shut Down 130 Stores

Russia lose more American business amid war in Ukraine

 on 23rd May 2022 @ 6.00pm
 starbucks said it decided to close its 130 stores and no longer have a brand presence in russia © press
Starbucks said it decided to close its 130 stores and no longer have a brand presence in Russia

Seattle coffee giant Starbucks is pulling out of the Russian market as a "punishment" for the nation's war in Ukraine.

In a memo to employees Monday, Starbucks said it decided to close its 130 stores and no longer have a brand presence in Russia.

The coffee giant did say it would continue to pay its nearly 2,000 Russian employees for six months and help them transition to new jobs.

starbucks  stores are owned and operated by alshaya group  a kuwait based franchise operator © press
Starbucks' stores are owned and operated by Alshaya Group, a Kuwait-based franchise operator.

The move follows the news that McDonald's Corp initiated a process to sell its business in Russia after 30 years.

As Neon Nettle reported:

McDonald's in March closed all of its 850 restaurants in Russia, where it says it employs 62,000 people, including its iconic Pushkin Square location.

The company said in a statement:

"After more than 30 years of operations in the country, McDonald's Corporation announced it will exit the Russian market and has initiated a process to sell its Russian business."

The company said it would seek to have a Russian buyer hire its employees and pay them until the sale closes.

Starbucks' stores are owned and operated by Alshaya Group, a Kuwait-based franchise operator.

A spokesperson for Alshaya referred questions to Starbucks on Monday.

the move follows the news that mcdonald s corp initiated a process to sell its business in russia after 30 years © press
The move follows the news that McDonald's Corp initiated a process to sell its business in Russia after 30 years.

Starbucks entered the Russian market in 2007.

In early March, after the Russian invasion of Ukraine, Starbucks announced that it would keep its Russian stores open but donate any profits to humanitarian relief efforts in Ukraine.

McDonald's said exiting Russia will not change its forecast of adding a net 1,300 restaurants this year, which will contribute about 1.5 percent to companywide sales growth.

But a few days later, after Coca-Cola, PepsiCo, McDonald's, and others temporarily halted their business in Russia, Starbucks changed course and temporarily closed its Russian stores.

"Through this dynamic situation, we will continue to make decisions that are true to our mission and values and communicate with transparency," then Starbucks Corp. CEO Kevin Johnson wrote in a message to employees.

[READ MORE] McDonald's to Punish Executives if They Hire Too Many White People

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