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As the Russian Invasion of Ukraine continues, some of the world’s biggest brands have started taking a stance and pulling their businesses out of Russia, even if it means losing millions in revenue. Companies like McDonald's, Coca-Cola, Starbucks, Apple, Visa & Mastercard and even Netflix are either leaving the former Soviet nation or suspending their activities indefinitely.
Apart from the obvious humanitarian motivators, the decision for these companies to cut ties with Russia is the result of pressure from the general population, where they risk losing share prices and other companies and organizations.
So which brands, in which industries, are leaving?
McDonald's, Coca-Cola, Starbucks and even Heineken are all but a few F&B giants that are stopping business in Russia. McDonald’s announced recently it would close approximately 850 of its restaurants, surrendering close to $50 million USD of revenue every month the stores remain closed. Meanwhile, Starbucks will be closing 100 of its coffee shops.
In Russia, Samsung is the leading supplier of smartphones in Russia. They too have announced halting operations in the country by suspending shipments. Both Sony and Nintendo have already suspended deliveries of gaming consoles. The most significant stance in tech is arguably Apple, where the company stopped its product sales in all of Russia while severely limiting some of its essential services like Apple Pay and Apple Maps.
Those who wanted to see the new ‘The Batman’ will have to wait because Warner Bros’ suspended the release of new movies in the entire country. But not just Warner Bros’, other production companies like Disney and Sony too. Disney Plus and Netflix have also stopped their services.
“Companies do not want to be associated with the Russian regime and what's happening in Ukraine. The rest of the world is more important when it comes to reputational risk.”
— Chris Weafer, CEO of Macro-Advisory
The response by these companies is an indication that the general public of consumers now holds much of the power when it comes to the success of a business. Brands now understand that reputation is an important aspect of equity and that values need to be demonstrated, even if it means taking a financial hit sometimes.
In case you missed it, this is how millennials are making brands more ethical.
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