Starbucks Records Quarterly Operating Loss for First Time in 27 Years in South Korea

[Economy 365]

Starbucks Korea has recorded a quarterly operating loss for the first time in 27 years since its entry into the domestic market.

According to its operator SCK Company, sales for the second quarter of this year stood at 747.3 billion KRW, down 6.1% from the same period last year.

Operating profit, which recorded 40.3 billion KRW in the second quarter of last year, swung to an operating loss of 18.4 billion KRW this year.

The worsening performance was reportedly influenced by the cancellation of the summer "e-Frequency" event, following a controversy over marketing phrases last May, under the pretext of restoring customer trust and reorganizing internal systems.

The number of stores at the end of the second quarter reached 2,185, an increase of 49 from the previous quarter, but sales declined and operating income turned to a deficit.

Sales for the first half of the year rose by 0.5%, but operating profit plummeted 85.5% from last year to 10.9 billion KRW.

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