Starbucks' Korean sales fall after backlash to 'Tank Day' ad campaign

Starbucks Korea has experienced a substantial decline in sales following a marketing campaign that invoked the tragic 1980 military crackdown on pro-democracy demonstrators, igniting widespread public outrage, as reported by the coffee chain's regional operator.

Shinsegae Group, the parent company of E-Mart which oversees Starbucks in South Korea, has come under intense scrutiny due to its "Tank Day" campaign, launched to coincide with the anniversary of the May 18 Gwangju Uprising. This uprising saw the military government deploy troops and tanks to quash pro-democracy protests.

During a press conference on Tuesday, Shinsegae Group chairman Chung Yong-jin expressed deep regret and urged the public not to direct their anger towards Starbucks Korea's employees and frontline staff.

"I take very seriously the fact that many individuals have experienced profound pain and anger due to Starbucks Korea's ill-conceived marketing campaign," Chung remarked.

"I accept full responsibility for the incident."

Chung further encouraged the public to refrain from venting their frustrations on Starbucks staff, indicating that the accountability rests with the management. Fortunately, there have been no immediate reports of severe incidents occurring at store locations.

Chung's first apology was issued on May 19, in which he acknowledged that the campaign caused "deep pain to the victims and bereaved families of the May 18 Democratization Movement, as well as to the general public."

In response to the backlash, Shinsegae terminated the head of Starbucks Korea and issued apologies. Additionally, Starbucks Global has expressed regret and announced that an investigation is underway.

A representative from Shinsegae remarked that sales have seen a significant downturn since the marketing incident.

"Although sales are not our primary focus at this moment, we have indeed observed a very significant drop," the representative stated.

At the news conference on Tuesday, Jeon Sangjin, a senior executive at Shinsegae Group, noted that the company has yet to ascertain definitive evidence suggesting that Starbucks Korea's marketing team intended to ridicule the pro-democracy movement, a claim the employees have contested.

Nevertheless, he indicated that some employees did not comply with management's requests to surrender their smartphones during a weeklong internal investigation.

Jeon emphasized that the company will review findings from the police inquiry, pledging that any employee found to have intended to mock the protesters would face termination.

The backlash against the campaign has incited public calls for boycotts, which were further amplified by government officials, including Interior and Safety Minister Yoon Ho-jung, who announced that Starbucks products would no longer be utilized at government events and denounced the chain's "anti-historical behavior."

The president of South Korea, Lee Jae Myung, took to X last week to express that the campaign exhibited "inhumane and disgraceful behavior by opportunists who deny the values of the South Korean community, along with basic human rights and democracy."

The 1980 crackdown in Gwangju led to the death or disappearance of hundreds of individuals under Chun Doo-hwan's military regime. Many aspects surrounding the event remain unverified, including the identity of the authority who ordered the use of lethal force.