Starbucks opened its first licensed cafe in Russia fifteen years ago. The market was seen as an emerging opportunity for the globally famous coffee brand. With Putin’s ongoing and unprovoked war against Ukraine receiving major international backlash, the chain has now decided to end its operations in the controversial nation.
Starbucks joins McDonald’s, Coca-Cola, and several others who faced stiff pressure from the public to stop doing business with the rogue state. The company will offer a transitional period so that its Russian employees are not left out in the cold. Starbucks will continue to pay its 2,000 Russian workers for six months and assist them to transition to new careers.
NBC News reported that Starbucks plans to have no further brand presence in Russia. All 130 locations will be closed. At the time of the announcement, Russia accounted for less than one percent of Starbucks’ annual revenue.
The official announcement comes months after Starbucks suspended business operations in Russia. In response to the invasion of Ukraine, the company placed a pause on their Russian business interests. Now, that pause will become permanent.
Starbucks has been quiet on the potential impact of their suspension of business in Russia. Former CEO Kevin Johnson pledged to donate any royalties from those businesses and franchises to humanitarian causes. Those royalties will no longer trickle in once the pull-out is complete.
Starbucks is just the latest in a long line of western corporations who are refusing to do business in Russia. While they didn’t take the huge financial hit that McDonald’s has, it is refreshing to see them showing support. Time will tell how many more companies decide that dealing with the Russians just isn’t worth it.
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