Starbucks Korea is facing a severe sales slump after a marketing campaign invoking a brutal 1980 military crackdown sparked a public outcry.
The 'Tank Day' tumbler promotion was launched on the anniversary of the May 18 Gwangju Uprising, when the military government sent in tanks to suppress pro-democracy protests. Hundreds are estimated to have died.
Shinsegae Group chairman Chung Yong-jin publicly apologized Tuesday, urging the public not to direct anger at baristas and frontline staff. “I take it very seriously that Starbucks Korea's inappropriate marketing hurt and angered many people,” Chung said. “I will take all responsibility.”
A company official confirmed a "very significant" drop in sales. An internal investigation found the e-commerce team approved the campaign without proper review, exposing “serious flaws” in risk management. The head of Starbucks Korea was fired last week.
Starbucks Global is aware of the situation and has been receiving updates on the probe. Shinsegae operates Starbucks Korea through SCK Company, majority-owned by E-Mart, with Singapore’s GIC holding a 32.5% stake.
Shares in Shinsegae initially fell 2.8% before recovering, while E-Mart shares rose 2.3%.