Starbucks sold its first venti cappuccino in Russia almost 15 years ago in a mall just south of Moscow. “This is an important milestone for the company, and we look forward to being a part of everyday Russian life,” said Cliff Burrows, president of Starbucks Europe, Middle East and Africa at the time.
Over the past 15 years, Starbucks has become part of everyday life for millions of Russians. Eventually, the company opened 130 stores nationwide.
These stores were closed since March when the company “suspended” its operations when Russia invaded Ukraine. On Monday, Starbucks announced that it would not reopen any of its stores in Russia.
“We have suspended all business activity in Russia, including the shipping of all Starbucks products,” the company said in a statement. statement on his blog. “Starbucks has made the decision to withdraw and no longer have a brand present in the market.”
Starbucks is not the only – or even the first – company to make the decision to no longer sell its products in Russia. Last week, McDonald’s announced that it would also permanently cease operations in response to the invasion of the country. The fast-food giant said it will sell its restaurants to its local licensee, which will operate them under a new name. Starbucks, however, is shutting down completely.
It was undoubtedly a difficult decision. I’m sure in many ways it was bittersweet.
It’s bittersweet because I imagine Starbucks executives would much rather continue selling coffee and pumpkin lattes and cake pops to Russian customers. Not because it brings in a particularly large sum of money in Russia.
The 130 stores that are closing represent less than one percent of the company’s turnover. It didn’t even raise the issue on its recent earnings call, meaning store closures will have a negligible impact on its earnings. I don’t think it’s a question of money.
I think it’s about the mission. Of the society mission statement is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”. They have quarters in Russia, and I’m sure the human spirit there could use some nourishment right now. If it did, I imagine Starbucks would still want to serve those cups of coffee.
At the same time, there is the obvious risk of doing business in a country at war, especially one as unpredictable as Russia. There is also the complicated moral argument about companies doing business where it benefits oppressive governments. It’s a delicate balance.
Starbucks isn’t alone in trying to strike that balance. More … than 1,000 Western companies said they would no longer do business in Russia, including Netflix, Apple and Microsoft. Certainly, there is something symbolic in the fact that some of the most recognized brands in the world decide to no longer do business in Russia.
However, I think mostly it’s about doing the right thing. Nothing about war feeds the human spirit, and Starbucks doesn’t want its brand associated with one country working to destroy another. Even though the cost of doing the right thing is low, we should all encourage businesses whenever they succeed.
As for Starbucks’ 2,000 employees in Russia, the company says it will continue to pay them for the next six months and help them find other jobs. This is perhaps the sweetest part of all. Starbucks is giving up doing business in Russia, but it’s not giving up on people.