Starbucks will exit Russia after 15 years, closing 130 licensed cafes
- Starbucks announced that it will exit Russia.
- The coffee chain has 130 locations in the country, which account for less than 1% of its annual revenue.
- Starbucks joins McDonald's, Exxon Mobil and British American Tobacco in pulling out of the country completely after the Kremlin invaded Ukraine.
The coffee giant announced Monday that it will no longer have a brand presence in Russia. Starbucks has 130 locations in the country, which account for less than 1% of the company's annual revenue. They are all licensed locations, so the Seattle-based company itself doesn't operate them.
Starbucks said it will pay its nearly 2,000 Russian workers for six months and help them transition to new opportunities outside of the coffee chain.
Both consumers and investors have pressured Western companies like Starbucks to cut ties with Russia to show opposition to the Kremlin's war with Ukraine, but unwinding licensing deals takes time. Starbucks has suspended all business activity with the country since March 8. The pause included shipments of all Starbucks products and temporarily shuttering 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 business to humanitarian causes.
But it was surely a smaller 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 sizable Russian and Ukrainian operations cost it $127 million in its first quarter. The two markets accounted for 9% of its revenue in 2021. The company had roughly 850 restaurants in Russia, most of which were operated by the company instead of licensees.
On Thursday, McDonald's announced it would be selling those locations for an undisclosed sum to a Siberian franchisee, who will run them under a new brand.
Dodge will discontinue its Challenger and Charger muscle cars next year
Dept. of Ed cancels $3.9 billion in student debt for over 200,000 borrowers—here’s who qualifies
The 12 least affordable housing markets in the U.S.
Biden administration cancels $3.9 billion in student debt for 208,000 borrowers defrauded by ITT Tech
These 8 Club stocks are beating the market since June's bottom and are still buys