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Business

Starbucks will leave Russia after 15 years, closing 130 licensed cafes




A woman drinks coffee at a Starbucks in a shopping mall in Khimki outside Moscow.

Alexander Natruskin | Russia

After 15 years in Russia, Starbucks will leave the market, joining companies such as McDonald’s, Exxon Mobil and British American Tobacco to withdraw completely from the country.

The coffee giant announced on Monday that it will no longer have a brand presence in Russia. Starbucks has 1[ads1]30 locations in the country, which account for less than 1% of the company’s annual turnover. They are all licensed locations, so the Seattle-based company itself does not operate them.

Starbucks said it would pay its nearly 2,000 Russian workers for six months and help them move into new opportunities outside the coffee chain.

Both consumers and investors pressured Western companies such as Starbucks to cut ties with Russia to show opposition to the Kremlin’s war with Ukraine, but terminating licensing agreements takes time. Starbucks has suspended all business activity with the country since March 8. The break included shipping of all Starbucks products and temporarily closed cafes.

In the latest quarterly results published in early May, the company did not disclose the financial consequences of the shutdown of business operations. Former CEO Kevin Johnson had promised to donate royalties from the Russian business to humanitarian causes.

But it was certainly a less economic blow than what was given to McDonald’s, which has been in Russia for over 30 years.

The fast food giant said the suspension of the significant Russian and Ukrainian business cost it $ 127 million in the first quarter. The two markets accounted for 9% of revenues in 2021. The company had about 850 restaurants in Russia, most of which were run by the company instead of licensees.

On Thursday, McDonald’s announced that it would sell these locations for an undisclosed sum to a Siberian franchisee, who will operate them under a new brand.



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