Business & Economy

Starbucks announces exit from Russian market due to Ukraine invasion

New York, May 23 (EFE).- The ubiquitous US coffeeshop chain Starbucks on Monday announced that it will withdraw from the Russian market, where it’s been operating for 15 years, joining other big US companies like McDonald’s and Exxon Mobil, who have made similar moves in reaction to Moscow’s invasion of Ukraine.

The chain will close 130 stores all across Russia but apparently this will not deal too much of a blow to the firm’s bottom line since these shops contribute less than 1 percent of the firm’s annual earnings, according to a statement released by the company.

Starbucks had already announced the suspension of its business activities in Russia on March 8.

Then, the firm emphasized its condemnation of Russia’s Feb. 24 invasion of Ukraine and said that, depending on how the situation evolved, Starbucks would continue to take measures that were in line with its company “values.”

On Monday, the company said: “As we mentioned on March 8, we have suspended all business activity in Russia, including shipment of all Starbucks products. Starbucks has made the decision to exit and no longer have a brand presence in the market.”

Starbucks said that it will pay six months’ salary to 2,000 of the firm’s employees in Russia.

In March, McDonald’s announced that it was temporarily closing its 850 stores in Russia and freezing its operations, dealing a major blow to the Russian economy given the chain’s popularity and earning power across the vast country.

The McDonald’s group last week announced that it had come to an agreement to sell its business in Russia to mogul and franchise partner Alexandr Govor, a move that will allow tens of thousands of employees in Russia to keep their jobs.

Sales in Russia and Ukraine account for nearly 2 percent of McDonald’s overall income and represent about 9 percent of its international revenues.

The fast food giant said in a statement that, according to the conditions of the agreement, Govor will acquire the entire chain in Russia and will develop it under a new brand name, emphasizing that the entrepreneur has been a partner of the firm since 2015 and that he personally opened and owns 25 of the firm’s stores in Siberia.

EFE jfu/fjo/dmt/bp

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