Business

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


After 15 years in business in Russia, Starbucks will exit the market, joining companies like McDonald’s, Exxon Mobil and British American Tobacco in pulling out of the country altogether.

The coffee giant announced on Monday that it will no longer have a brand presence in Russia. Starbucks has 130 locations nationwide, which account for less than 1% of the company’s annual revenue. These 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 transition to new opportunities outside the coffee chain.

A woman drinks coffee from a Starbucks in a shopping center in Khimki, outside Moscow.

Alexander Natruskin | Russia

Consumers and investors have pressured Western companies like Starbucks to sever ties with Russia to oppose the Kremlin’s war with Ukraine, but licensing deals are taking time to unravel. Starbucks has suspended all business with the country since March 8. The pause included shipments of all Starbucks products and the temporary closure of cafes.

In its latest quarterly results released in early May, the company did not disclose the financial impact of the suspension of business operations. Former CEO Kevin Johnson had pledged to donate royalties from the Russian company to humanitarian causes.

But it was surely a lesser financial blow than that dealt to McDonald’s, which has been in Russia for more than 30 years.

The fast-food giant said the suspension of its large Russian and Ukrainian operations cost it $127 million in the first quarter. The two markets accounted for 9% of its revenue in 2021. The company had about 850 restaurants in Russia, most of which were company-operated instead of licensees.

On Thursday, McDonald’s said it would sell those locations for an undisclosed amount to a Siberian franchisee, which will operate them under a new brand.


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William

Friendly bacon buff. Unapologetic problem solver. Avid food lover. Amateur alcoholaholic. Organizer. Student
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