Breaking: Starbucks Suspends Russian Operations

According to foreign media reports, due to the ongoing war between Russia and Ukraine, McDonald's, Starbucks, PepsiCo, and Coca-Cola successively announced on March 8th that they would suspend all business operations in Russia. Meanwhile, McDonald's and Starbucks will suspend store operations and commercial activities in Russia.

McDonald's Suspends Russian Operations

Previously, McDonald's faced condemnation and criticism from people in multiple countries for not making any statement when Russia launched the war against Ukraine. Under public pressure, McDonald's issued a statement on March 8th: Due to the unnecessary human suffering occurring in Ukraine, the company will suspend operations at its 850 McDonald's stores in Russia, while stating it "cannot predict" when they will reopen.

After McDonald's announced the suspension of store operations in Russia, CEO Chris Kempczinski stated in an open letter to employees: "The conflict in Ukraine and the humanitarian crisis in Europe have brought unspeakable suffering to innocent people. As a system, we (McDonald's) will join the world in condemning aggression and violence and pray for peace." The open letter also stated that the company will continue to pay wages to its 62,000 employees at McDonald's in Russia and donated $5 million to an employee assistance fund.

Starbucks Follows Suit

After McDonald's issued its statement, Starbucks also released a statement regarding the suspension of business and store operations in Russia. Starbucks CEO Kevin Johnson stated that Starbucks will continue to provide support to Russian employees, but all stores in Russia will suspend operations, and peripheral products will also suspend shipments.

Before issuing the statement on March 8th, Starbucks CEO Kevin Johnson had published another open letter on March 4th, which wrote: Starbucks condemns Russia's unprovoked, unjust, and horrific attacks on Ukraine and expresses sympathy for all affected people. He also pledged to donate royalties from its Russian business to humanitarian causes in the besieged country.

Limited Market Presence

In terms of store count, Starbucks has a very small presence in the Russian and Ukrainian markets. According to Bank of America Securities, the company has approximately 130 stores combined in Russia and Ukraine, with about 2,000 employees. These approximately 130 stores are all franchised, not directly operated by Starbucks US headquarters, meaning these 130 stores are not operated by Starbucks' US parent company. Foreign market analysts estimate that the revenue from these stores accounts for less than 1% of Starbucks' global revenue.

Other Major Companies Take Action

After McDonald's and Starbucks issued their statements, Coca-Cola Company also stated it would suspend business operations in Russia and would continue to monitor the situation. Subsequently, PepsiCo also announced it would stop capital investments in Russia as well as all advertising and promotional activities.

PepsiCo CEO Ramon Laguarta said in a letter to company employees: "PepsiCo entered the Russian market at the height of the Cold War and helped build common ground between the United States and the Soviet Union. However, given the current situation in Ukraine, we will suspend the sale of all PepsiCo beverage series in Russia, including 7 Up and Mirinda."

Additional Information

Image source: Internet

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