Starbucks leaves Russia after 15 years, closing 130 licensed cafes

A woman drinks coffee at a Starbucks in a shopping center in Khimki outside Moscow.

Alexander Natruskin | Russia

After working in Russia for 15 years, Starbucks is exiting the market and joining companies like McDonald’s, Exxon Mobil and British American Tobacco to pull out of the country completely.

The coffee giant announced on Monday that it will no longer have a brand presence in Russia. Starbucks has 130 locations in the country, accounting for less than 1% of the company’s annual sales. They are all licensed locations, so the Seattle-based company does not operate them itself.

Starbucks said it will pay its nearly 2,000 Russian employees for six months and help them transition into new opportunities outside the coffee chain.

Consumers and investors alike are pressuring Western companies like Starbucks to cut ties with Russia in order to show opposition to the Kremlin’s war with Ukraine, but winding up licensing deals takes time. Starbucks has suspended all business with the country since March 8. The break included shipping all Starbucks products and temporarily closing cafes.

In its latest quarterly results released in early May, the company did not disclose the financial impact of the suspension of operations. Former CEO Kevin Johnson has promised to donate royalties from the Russian company to humanitarian causes.

But it was certainly a smaller financial blow than McDonald’s, which has been in Russia for more than 30 years.

The fast food giant said the suspension of its sizeable Russian and Ukrainian operations cost it $127 million in the first quarter. The two markets accounted for 9% of sales in 2021. The company had about 850 restaurants in Russia, most of which were operated by the company rather than by licensees.

On Thursday, McDonald’s announced it would sell those locations for an undisclosed amount to a Siberian franchisee, who will run them under a new brand.

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