Starbucks Korea Suffers First Quarterly Loss in 27 Years Amid Boycott Over 'Tank Day' Fiasco

Starbucks Korea has plunged into its first quarterly operating loss in 27 years, a stark reversal attributed to a consumer boycott and the cancellation of a signature promotion. SCK Company, the operator of Starbucks in South Korea, posted an operating loss of 18.4 billion won in the second quarter, a dramatic swing from a 40.3 billion won profit in the same period last year.

The financial slump is widely believed to stem from a marketing campaign in May that used slogans like "May 18" and "Tank Day" in conjunction with tumblers, which many interpreted as mocking the 1980 Gwangju pro-democracy uprising. The government's brutal suppression of the movement in Gwangju involved the deployment of tanks, leading to outrage among consumers who organized a boycott of the coffee chain.

Adding to the financial woes, Starbucks canceled its "Summer e-Frequency" promotion in June. This popular campaign, which rewards customers with exclusive freebies after purchasing a certain number of beverages, is a key driver of sales and customer engagement. Its absence, directly linked to the fallout from the "Tank Day" controversy, significantly impacted revenue.

Despite opening 49 new outlets over the past year, bringing the total to 2,185, SCK Company's cumulative operating profit for the first half of the year plummeted by 85.5% to just 10.9 billion won. This sharp decline was cushioned only by a first-quarter operating profit of 29.3 billion won. While Starbucks Korea struggled, its parent company Emart saw its overall performance boosted by strong results from its Traders warehouse stores and Emart Everyday supermarkets.