Starbucks Korea Faces 'Very Significant' Sales Drop After Marketing Campaign Backlash

Starbucks Korea has suffered a “very significant” drop in sales after a marketing campaign that evoked a brutal 1980 military crackdown on pro-democracy protesters triggered a public outcry, according to the coffee chain’s local operator. Shinsegae Group, whose subsidiary E-Mart owns the coffee chain in South Korea, has faced mounting criticism over its so-called “Tank Day” campaign, launched on the anniversary of the May 18 Gwangju Uprising, when the military government deployed troops and tanks to suppress pro-democracy demonstrations.

In a news conference on Tuesday, Shinsegae Group chairman Chung Yong-jin made a public apology and asked people not to take out any anger on Starbucks Korea employees and front-line staff. “I take it very seriously, the fact that many people felt deep pain and anger because of Starbucks Korea’s inappropriate marketing campaign,” Chung said. “I will take all responsibility for the incident.” Chung also asked people not to take out their frustration on staff at Starbucks shops, saying the responsibility lies with management. There were no immediate reports of major incidents at stores. Chung issued his first apology on May 19, saying in a statement that the campaign caused “deep pain to the victims and bereaved families of the May 18 Democratization Movement as well as to the public”. Shinsegae fired the head of Starbucks Korea last week after apologising over the campaign. Starbucks Global also apologised and said that an investigation had begun. A Shinsegae official said sales had fallen sharply since the marketing controversy. “While sales are not our main concern at the moment, we have seen a very significant drop,” said the official. At Tuesday’s news conference, Jeon Sangjin, a senior Shinsegae Group executive, said the company had yet to find conclusive evidence that Starbucks Korea marketing employees intended to mock the pro-democracy movement, an accusation the employees have denied. However, he said some employees refused management requests to hand over their smartphones during a weeklong internal review. Jeon said the company would look at the results from the police inquiry, and any employee found to have intended to ridicule protesters would be fired. The anger over the campaign has triggered public calls for boycotts, amplified by government officials, including Interior and Safety Minister Yoon Ho-jung, who said Starbucks products will no longer be used at government events and lamented the chain’s “anti-historical behaviour”. The country’s president, Lee Jae Myung, said on X last week that the campaign displayed “inhumane and disgraceful behaviour by cheap profiteers who deny the values of the South Korean community, basic human rights and democracy”. Hundreds of people are estimated to have died ⁠or gone missing when Chun Doo-hwan’s military government cracked down on the protests in Gwangju. Many details remain unconfirmed, including who gave the order to open fire.