Will Russia be Starbucks’ saviour?
The world's largest coffeehouse chain Starbucks is closing even more of its U.S. shops. Around 600 underperforming stores will shut over the next 12 months. But how will this move affect the company's business in Russia?
Starbucks has already slashed its plans for new U.S. shops. Now it's putting 12,000 staff out of work. It will shrink its global workforce by 7 per cent, blaming falling consumer demand.
Some experts say Starbucks tried to grow too fast, while the world is getting saturated with coffee shops.
Still, the global coffee house is present in 44 countries and Russia is one of the latest.
After several failed attempts Starbucks opened its first Moscow store last September. It now has five outlets in Russia's capital.
From this modest start, the company had planned to open 3,000 coffee shops across the country.
Despite its high density, the Russian market is very attractive. For example, in Paris the footfall for one coffee house is 126 people, in New York 360 people, while in Moscow 3167 people.
So far, the company's cutbacks have not reached Russia. Where the number of business people and young couples wandering into coffee houses is just starting to grow.
As U.S. consumers turn their back on the four-dollar latte it may get a new lease of life in Russia.