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Starbucks Korea swings to Q2 operating loss after marketing backlash

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SEOUL, Aug 13 : The operator of Starbucks Korea posted an operating loss in the second quarter as sales fell after backlash over a marketing campaign that evoked a brutal 1980 military crackdown on pro-democracy protesters, and the suspension of its flagship summer promotion.

Here are some details:

• Starbucks Korea’s operator SCK Company swung to an 18.4 billion won ($13.4 million) operating loss in the second quarter from an operating profit of 40.3 billion won a year earlier and 29.3 billion won in the preceding quarter.

• E-Mart, the parent of SCK, said in an earnings announcement on Thursday that SCK did not hold its usual summer promotional campaign in June.

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• In May, Starbucks Korea halted and apologised for its May 18 “Tank Day” tumbler campaign after it drew criticism for evoking the 1980 Gwangju pro-democracy uprising.

• Parent Shinsegae Group dismissed the head of Starbucks Korea, while the group later said sales had dropped “very significantly” and held historical awareness and social sensitivity training for staff.

• On Thursday, E-Mart did not cite the controversy or subsequent boycott calls as a direct reason for the quarterly decline.

Source: Reuters

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