A woman drinks coffee at Starbucks in a mall in Khimki near Moscow.
Alexander Natruskin Russia
After 15 years in Russia, Starbucks will leave the market to join companies such as McDonald’s, Exxon Mobil and British American Tobacco with a full withdrawal from the country.
The coffee giant announced on Monday that the brand will no longer be present in Russia. Starbucks has 130 locations in the country, representing less than 1% of the company’s annual revenue. 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 to new opportunities outside the coffee chain.
Both consumers and investors are pushing Western companies like Starbucks to sever ties with Russia to show resistance to the Kremlin’s war with Ukraine, but it takes time to expand licensing deals. Starbucks has suspended all business with the country since March 8. The break included the delivery of all Starbucks products and the temporary closure of cafes.
In its latest quarterly results, published in early May, the company did not disclose the financial impact of the suspension of business operations. Former CEO Kevin Johnson has promised to donate royalties from Russian business to humanitarian causes.
But it was certainly a smaller financial blow than the one inflicted on McDonald’s, which has been in Russia for more than 30 years.
The fast-food giant said shutting down significant operations in Russia and Ukraine cost him $ 127 million in the first quarter. Both markets account for 9% of its revenue in 2021. The company has about 850 restaurants in Russia, most of which are run by the company instead of licensees.
On Thursday, McDonald’s announced that it would sell the seats for an undisclosed sum to a Siberian franchisee who would operate them under a new brand.
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