Starbucks almost sold its first venti cappuccino in Russia 15 years ago in a shopping center just south of Moscow. “This is an important step for the company and we look forward to being a part of Russians’ everyday lives,” said Cliff Burrows, Starbucks Europe, Middle East and Africa president at the time.
For the past 15 years, Starbucks has been a part of the daily lives of millions of Russians. Ultimately, the company opened 130 stores in the country.
Those shops have been closed since March when the company “paused” operations when Russia invaded Ukraine. Starbucks said Monday it will not reopen any of its stores in Russia.
“We have suspended all business activities in Russia, including the shipment of all Starbucks products,” the company said in a statement statement on his blog† “Starbucks has made the decision to discontinue and no longer has a brand presence in the market.”
Starbucks isn’t the only – or even the first – company to make the decision to stop selling its products in Russia. Last week, McDonald’s said it would also stop operating permanently in response to the invasion of the country. The fast food giant said it will sell its restaurants to its local licensee, who will operate them under a new name. Starbucks, however, is closing its doors completely.
It was undoubtedly a difficult decision. I’m sure it was bittersweet in many ways.
It’s bitter because I imagine Starbucks executives would rather continue to sell coffee, pumpkin spice lattes, and cake pops to Russian customers. Not because it makes a lot of money in Russia.
The 130 stores that close represent less than one percent of the company’s sales. It hasn’t even brought up the issue during its recent earnings call, meaning closing its stores will have a negligible impact on revenue. I don’t think it’s about the money.
I think it’s about the mission. The companies mission statement is to “inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” They have neighborhoods in Russia, and I’m sure the human mind could use some nurturing there right now. If it could, Starbucks would like to continue serving those cups of coffee.
At the same time, there are obvious risks to doing business in a country at war, especially in a country as unpredictable as Russia. There’s also the complicated moral argument about corporations doing business that profits oppressive governments. It’s a tricky balance.
Starbucks isn’t alone in trying to strike that balance. More than 1,000 western companies have said they will no longer do business in Russia, including Netflix, Apple and Microsoft. Certainly, there is something symbolic about the decision of some of the world’s most recognized brands to stop doing business in Russia.
But mostly I think it’s about doing the right thing. Nothing about war feeds the human mind, and Starbucks doesn’t want its brand associated with a country in the process of destroying another country. Even if the cost of doing the right thing is small, we all need to encourage companies every time they do it right.
As for the 2,000 Starbucks employees in Russia, the company says it will continue to pay them for the next six months and help them find other work. That might be the funniest thing of all. Starbucks is giving up doing business in Russia, but it’s not giving up on the people.
