facebook pixal
Financing

Starbucks says it is leaving Russia

The coffee giant joins McDonald’s in pulling up stakes in the country over the war in Ukraine.
starbucks Russia
Photograph: Shutterstock

Starbucks on Monday said it is closing its restaurants in Russia for good, joining McDonald’s in pulling out of the market completely over the Ukraine invasion.

The Seattle-based coffee giant has about 130 locations. It suspended operations there in March amid a global corporate backlash over the invasion.

The company said it would continue to support 2,000 employees in Russia, paying them for six months and providing help for them to find new jobs outside the country.

Restaurant companies of all kinds have been leaving the country over the war. McDonald’s closed its restaurants in Russia and then sold them to one of its operators there, a move that will cost that company as much as $1.4 billion.

Nearly 1,000 companies have curtailed business in Russia, according to the Yale Chief Executive Leadership Institute, including several companies from the IT company Accenture to the Swiss financial firm Zurich Insurance Group, have left the country altogether.

The moves represent a rare pullback from a global market for major U.S. restaurant chains that have been pushing to add locations everywhere. In some cases, the moves are slowing overall growth for some companies. Yum Brands, which owns both Pizza Hut and KFC, is selling its restaurants in those brands to local operators and redirecting profits to humanitarian aid.

The move cut Yum’s operating profit by 1% in the first quarter and was expected to cut its operating profit by 3% for the full year.

Burger King operated 820 locations in Russia. Those restaurants represented about 2% of parent company Restaurant Brands International’s system sales and 1.7% of the company’s EBITDA, or earnings before interest, taxes, depreciation and amortization. At Starbucks, the 130 locations represented less than 1% of the company’s revenues.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Trending

More from our partners