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Starbucks exits Russia, to close 130 stores in the country

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Yahoo Finance Live anchors discuss Starbucks exiting the Russian market as the Russia-Ukraine war continues.

Video transcript

- Well, Starbucks is exiting the Russian market after 15 years of operating there. The company has 130 locations in the country. That accounts for less than 1% of its annual revenue. Starbucks will pay its nearly 2,000 workers in Russia for six months, and then help them transition into other jobs.

And Akiko, this obviously coming after the news not long ago of McDonald's making their exit out of Russia. And again, this is thematic to what we were talking about at the beginning of the show here, large multinational companies that had presence in many corners of the world, almost every corner of the world, possibly now starting to pull back on some of that with some of these political divisions.

- Yeah, and Starbucks, just like with McDonald's, so much not a story about the revenue hit these companies are going to take. As you pointed to, it's still--

- Small, small share.

- --a very small fraction. But it is about this-- I can't find a better word than decoupling. I don't like using that word, but it is about this fragmentation that we're starting to see, I mean, Russia increasingly becoming isolated.

- Yeah. And we talk about the financial implications for these large companies, but there's an enormous social impact of this, as well. McDonald's, when they opened up their first location-- we were talking about this with Brooke DiPalma-- is such an enormous moment for not only Russia, but for the world, to see the two multinational-- you know, these large countries that were going at it for a long time starting to have some sort of cultural overlap.

And you wonder if that's going to decouple a little bit. I mean, even just for tourists that might have considered Russia a travel destination, not necessarily the case that they're not going to go because they don't have Starbucks and McDonald's, but it becomes a little bit less familiar of a place for them to visit if they don't have the presence of these types [INAUDIBLE]

- Well, and the politics have always been there, but these brands, in many ways, kind of bridge that divide. Right? When you're talking about Western brands like a Starbucks, as well as a McDonald's, I mean, McDonald's, to your point, going back decades ago, I mean, that was a big divide in terms of bringing the two countries together culturally. So that's really probably more significant than the revenue hit these guys [INAUDIBLE]

- Well, you have the joke about-- well, I mean, in some cases, it's actually been the case that McDonald's have served as embassies in other countries during times of crisis. So again, you don't have that presence there anymore. It's not quite the same thing, but it's not all that dramatic to say it's almost like an embassy no longer being there. But of course, we'll see if other companies continue to follow in McDonald's and Starbucks' footsteps. Coming up on--

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