Low-Price Transfer! Starbucks Changes Hands and Reopens!

According to local Russian media reports, Anton Pinsky, founder of the renowned local catering company Pinskiy&Co, will complete the signing by the end of this month to acquire all Starbucks store lease rights in the country and the location in Pushkino Shopping Park, and launch a new local coffee chain brand – Магадан Краснодар (Magadan Krasnodar).

Starbucks Exit and Acquisition

Since Starbucks announced on March 8th this year that it would end its 15-year franchise in Russia, the brand's 130 coffee shops in the country have remained closed. Although the store distribution was not extensive, they had not yet found a suitable buyer.

Until early June this year, local residents reported that a Starbucks store in the Aurora Shopping Center suddenly had long queues, selling coffee beverages and peripheral goods at discounts, leading everyone to speculate whether Starbucks had found a new buyer to take over.

On July 4th, "SysoevFM," a radio channel specializing in Russian catering, reported that all Starbucks stores in Russia would be taken over by Pinskiy&Co. If the transaction succeeds, Starbucks will, like McDonald's, be renamed before resuming operations.

Precedent: McDonald's Exit

After the outbreak of the Russia-Ukraine conflict, McDonald's Corporation announced in mid-May that it would withdraw from the Russian market. Three days after this decision, all 850 stores under the brand, all employees, and production formulas were taken over by a Russian businessman, Alexander Govor, but no longer using "McDonald's" as the restaurant name, instead renamed "Vkusno i tochka (Delicious and that's it)."

New Direction for Russian Coffee Market

Unlike McDonald's, Anton Pinsky will create a new local Russian coffee chain brand but will not use Starbucks' production formulas and supply chain. Starbucks will also need to be renamed like McDonald's, providing local consumers with cost-effective, high-quality coffee.

Pinskiy&Co operates multiple restaurants in Russia, including 10 restaurants such as Russian cuisine, French cuisine, light meals, coffee shops, as well as an independent food delivery platform. Sergey Mironov, a Moscow catering market inspector, stated that the company has significant advantages in taking over, as it can reduce costs through long-term leasing due to its scale, while also providing delivery services.

He also mentioned that local consumers genuinely like the Starbucks brand because they can get a cup of coffee with stable quality in the shortest time, although the prices are relatively high.

After Pinskiy&Co's acquisition and brand reorganization, as long as they can maintain the same fast and stable quality output as Starbucks and add delivery services, other foreign-brand coffee shops will not be their competitors.

Market Opportunities for Local Brands

Previously, when the Russia-Ukraine conflict led many foreign brands to decide to withdraw from Russia, many local market analysts stated that this was a rare development opportunity for Russian local companies and brands. Because compared to foreign brands needing to pay additional franchise fees, local brands will have greater advantages in operating costs and products.

Russian market analysts predict that the transaction amount for this Starbucks acquisition will be between 1.6-3 billion rubles, but with the possibility of continued decline in the US dollar exchange rate, it is not impossible that the transaction could succeed for as little as 700 million rubles.

Image source: Internet

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