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Starbucks leaving Russia for good, 130 cafes set to officially shut
Starbucks Corp. announced on Monday, May 23, that it is officially leaving Russia after suspending its business in March due to the ongoing war in Ukraine that was started by Russia. The coffee chain will be closing its 130 licensed store outlets after 15 years of presence in the country.
With its move, Starbucks is the next major company and food brand to announce its permanent departure from the Russian market. McDonald’s Corp. withdrew last week after serving its burgers to the Russians for more than 30 years. The burger joint’s departure has been described as the end of an era. The fast-food chain ended up selling its business in Russia to a local business licensee, which will rebrand the stores and operate under a new name.
According to Reuters, Starbucks’ 130 outlets in Russia are wholly owned and operated by Alshaya Group, which is its licensee for the brand’s domestic operation. Prior to its departure, the company has almost 2,000 employees.
McDonald’s mentioned that it may take a hit of around $1.4 billion for its exit in Russia, but Starbucks did not provide any details of its own financial impact resulting from its business withdrawal.
“As we mentioned on March 8, we have suspended all business activity in Russia, including the shipment of all Starbucks products. Starbucks has made the decision to exit and no longer have a brand presence in the market,” Starbucks wrote in an updated post on its press center page. “We will continue to support the nearly 2,000 green apron partners in Russia, including pay for six months and assistance for partners to transition to new opportunities outside of Starbucks.”
CNBC reported that Starbucks would not abandon its 2,000 staff as it permanently closes its stores. As a means of support, the company will continue to pay them for six months and help them find new opportunities outside of the company.
In addition, Starbucks’ former chief executive officer, Kevin Johnson, made a pledge earlier this month. He said they will donate royalties from the firm’s business in Russia to humanitarian causes.