A person holds up a phone showing the balance of a Starbucks card in May 2026. (Choi Hyeon-su/Hankyoreh)
The operator of Starbucks Korea posted an operating loss in the second quarter, marking Starbucks’ first quarterly loss since entering the Korean market 27 years ago.The performance slump is presumed to be due to a consumer boycott provoked by a marketing campaign widely regarded as mocking victims of the 1980 massacre of pro-democracy activists in Gwangju, compounded by Starbucks’ cancellation of its signature “Summer e-Frequency” promotion.According to results disclosed by Emart on Thursday, Emart subsidiary SCK Company posted net sales of 747.3 billion won in the second quarter, down 6.1% from a year earlier.SCK Company’s earnings swung from an operating profit of 40.3 billion won in the second quarter of last year to an operating loss of 18.4 billion won in the second quarter of this year, for a year-on-year decline of 58.7 billion won.That reversal was even more shocking compared with SCK Company’s operating profit of 29.3 billion won in the previous quarter, marking a decline of 47.7 billion won in just three months.This was Starbucks Korea’s first quarterly operating loss since it opened its first Korean location near Ewha Womans University, in Seoul, in 1999.The earnings downturn has been attributed to the fallout over a May marketing campaign that appeared to make light of the May 18 Democratization Movement of 1980, when the Korean government brutally suppressed a democratization movement in the southwestern city of Gwangju.Starbucks’ “Tank” series of tumblers included promotional slogans such as “May 18” and “Tank Day” that appeared to deliberately evoke the tanks fielded by government troops sent to pacify the population. A phrase about “thwack[ing] it on the desk” seemed to echo the language used by the police to describe the death of activist Park Jong-cheol during torture.Outraged consumers soon organized a boycott of the coffeehouse franchise.Emart cited the decision not to hold the Summer e-Frequency promotion in June as the primary factor behind SCK Company’s poor performance.Summer e-Frequency, in which customers who purchase a set number of beverages are given exclusive freebies, has been one of the chain’s flagship promotions. But it was canceled this year in the wake of the Tank Day brouhaha.Despite adding 49 Starbucks outlets over the past year for a current total of 2,185, SCK Company posted a cumulative operating profit of just 10.9 billion won for the first half of the year, plunging 85.5% from the first half of last year (75.4 billion won) as a result of the second-quarter loss.The company barely remained profitable in the first six months thanks to its first-quarter operating profit of 29.3 billion won.But parent company Emart’s overall performance was boosted by strong results from its Traders warehouse stores and Emart Everyday supermarkets.Emart’s standalone gross sales rose 3.5% year on year to 4.44 trillion won in the second quarter, while operating profit increased 64% to 25.6 billion won.But amid weak performance at Starbucks operator SCK Company and other key subsidiaries, Emart posted consolidated revenue of 6.92 trillion won for the second quarter, declining 1.8% year on year.That corresponded to a consolidated operating loss of 43 billion won.By Yi Ju-been, staff reporterPlease direct questions or comments to [english@hani.co.kr]
