Starbucks Is Permanently Closing All of Its Stores in Russia
On Monday, Starbucks announced that it would be leaving Russia for good, and "will no longer have a brand presence" in the country. The Seattle-based company revealed its exit in three concise sentences on its website, adding that it would pay its 2,000 Russian employees for six months and would also provide assistance as they looked for work elsewhere.
In March, Starbucks suspended all of its business activities in Russia in response to the country's invasion of neighboring Ukraine. "Through this dynamic situation, we will continue to make decisions that are true to our mission and values and communicate with transparency," then-CEO Kevin Johnson wrote. "Thank you for the care and concern you are sharing with me and your leaders."
According to CNBC, there were 130 Starbucks locations in Russia, and all of them were operated by a licensee. The first Russian Starbucks store opened in 2007, at a shopping mall in Khimki. (And the first-ever Starbucks order placed in the country was for a single venti cappuccino.) The Alshaya Group, a Kuwaiti company that owns all 130 stores, told the BBC that the choice to exit Russia was "a Starbucks announcement." It has not yet revealed what it will do with those now-shuttered locations.
Last week, McDonald's stated that it would be selling its Russian restaurants to Alexander Govor, a licensee who operates 25 McDonald's locations in Siberia. CNBC reported that Govor had agreed to keep all of the company's existing employees for "at least two years." The existing McDonald's restaurants will be "de-Arched," according to the company, which means they'll be stripped of their branding, menus, and McIdentities and reopened under a new name.
"The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald's to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald's values," the company said in a statement.
The first McDonald's opened in Russia on January 31, 1990 in Moscow's Pushkin Square and it served a record-setting 30,000 customers that day. In the decades that followed, it expanded to around 850 locations throughout the country. It closed all of those Russian restaurants in early March, and its 108 restaurants in Ukraine also remain closed. (McDonald's has paid the full salaries of its Ukrainian employees ever since and, last week, it confirmed that it would continue to do so.)
"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 President and CEO Chris Kempczinski said. "Their dedication and loyalty to McDonald's make today's announcement extremely difficult. However, we have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there."
Castrodale, J. (2022, May 24). Starbucks Is Permanently Closing All of Its Stores in Russia. Food & Wine. https://www.foodandwine.com/news/starbucks-mcdonalds-us-companies-leave-russia