Starbucks ad leads to boycott and store closures in South Korea

Starbucks South Korea will close all stores (over 2,000) early on June 22 for a mandatory history and social sensitivity training as it grapples with backlash over a campaign accused of mocking victims of the 1980 pro-democracy crackdown.

The uproar started when Shinsegae Group, which holds a 67.5% stake in Starbucks Korea, launched a May 18 promotion for its “SS Tank” stainless-steel tumbler, branding the occasion “Tank Day.”

The date marks the 1980 Gwangju pro-democracy uprising, and subsequent military deployment by General Chun Doo-hwan, which killed about 200 people, according to government records. Activists claim the toll is higher.

The campaign slogan “Thwack it on the table!” further outraged the public as it echoed a false explanation the police used to cover the notorious 1987 torture death of a student activist.

Aftermath
The Starbucks promotion was canceled within hours, and the CEO was fired. However, the police have opened a criminal investigation into the executive and the chairman of the Shinsegae Group.

The financial fallout has been swift. The Starbucks closure is estimated to cost $1.4 million in lost sales.

Following the controversy, sales plummeted 25%. Payment volumes plunged 26% within a week of the promotion launch but have partially recovered by 12.8% in the first week of June.