Saturday, July 2, 2022

Starbucks to Close 130 Stores in Russia

Starbucks
Starbucks/Getty

*Starbucks announced Monday that it is cutting ties with Russia after 15 years of operating in the market.

The coffee giant is joining companies like McDonald’s, Exxon Mobil and British American Tobacco in withdrawing from the country amid the ongoing conflict with Ukraine, per CNBC.

Starbucks said it will close all 130 locations in the country and will pay its nearly 2,000 Russian workers for six months. These staffers will also be provided support from the company related to opportunities to transition to new jobs outside of the coffee chain.

“We condemn the unprovoked, unjust and horrific attacks on Ukraine by Russia, and our hearts go out to all those affected,” former CEO Kevin Johnson told employees in March. “The invasion and humanitarian impact of this war are devastating and create a ripple effect that is felt throughout the world.”

Starbucks paused operations in Russia in early March, but now the company is leaving for good.

READ MORE: McDonald’s to Exit Russian Market Amid Ongoing Ukraine Conflict

Previously, McDonald’s announced that the fast-food giant will be selling its 850 restaurants in Russia to a Siberian franchisee so they could be rebranded. 

“This was the very best of a series of difficult choices,” James O’Rourke, professor of management at the University of Notre Dame’s Mendoza College of Business, told CBS. “Under this arrangement, McDonald’s Russian employees will have a steady employment future, ordinary citizens will have a mostly familiar neighborhood spot for a sandwich and a soft drink, and by ‘de-arching’ the 850 stores in Russia McDonald’s Corporation will protect the brand and recover at least some of its capital investment.”  

McDonald’s CEO Chris Kempczinski said: “We have a long history of establishing deep, local roots wherever the Arches shine. We’re exceptionally proud of the 62,000 employees who work in our restaurants, along with the hundreds of Russian suppliers who support our business, and our local franchisees.”

McDonald’s operations in Russia’s market began in January of 1990. Kempczinski said the decision to exit the country was made “extremely difficult” due to the regional employees.

“Their dedication and loyalty to McDonald’s make today’s announcement extremely difficult,” Kempczinski said. “However, we have a commitment to our global community and must remain steadfast in our values.”

“And our commitment to our values means we can no longer keep the Arches shining there,” Kempczinski added. “[I]t is impossible to imagine the Golden Arches representing the same hope and promise that led us to enter the Russian market 32 years ago.”

Ny MaGee
Ny MaGee is an entertainment reporter with over 15 years of experience working in the film industry in areas including production and post-production, marketing, distribution, and acquisitions. She has worked for legendary film producer Roger Corman, Quentin Tarantino's production team at Miramax, the late Larry Flynt, MTV/ VH1, Hallmark Channel, Paramount, Jim Henson Co., Parade Magazine, and various LA-based companies representing above-the-line talent.

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