MILAN — Starbucks, Coca-Cola and Pepsi are joining McDonald’s in pausing operations in Russia as a response to the invasion of Ukraine. Starbucks announced yesterday it was suspending all business activity in Russia as Vladimir Putin’s forces continue their nearly two-week-old invasion of the neighbouring country.
In a letter published Tuesday, Starbucks CEO Kevin Johnson expressed his concern about the ongoing invasion, writing that the coffee chain will provide support to nearly 2,000 of its Russia-based employees as its license partners will temporarily close down stores.
“We continue to watch the tragic events unfold and, today, we have decided to suspend all business activity in Russia, including shipment of all Starbucks products,” Johnson wrote in his letter.
“Through this dynamic situation, we will continue to make decisions that are true to our mission and values and communicate with transparency. Thank you for the care and concern you are sharing with me and your leaders,” Johnson added. “As always, I’m extremely proud to be your partner.”
Starbucks has about 130 outlets in Russia and Ukraine, according to Bank of America Securities. They are all licensed locations, so the Seattle-based company itself doesn’t operate them, reports Cnbc. Cowen analyst Andrew Charles estimated that they account for less than 1% of Starbucks’ global revenue.
McDonald’s, which owns 84% of its stores in Russia, could take a big financial hit because of the closures. In a recent regulatory filing, McDonald’s said its restaurants in Russia and Ukraine contributed 9% of its annual revenue, or around $2bn.
“As we move forward, McDonald’s will continue to assess the situation and determine if any additional measures are required. At this juncture, it’s impossible to predict when we might be able to reopen our restaurants in Russia,” McDonald’s said in a statement.
“We are experiencing disruptions to our supply chain along with other operational impacts. We will also closely monitor the humanitarian situation.”
