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Company News

UPDATE 1-Starbucks Korea cuts capacity, delays promotion after COVID-19 cluster

(Adds comments from Starbucks customers)

SEOUL, Aug 18 (Reuters) - Starbucks Corp’s South Korean unit is scrambling to curb the spread of coronavirus, cutting seating capacity in its cafes and delaying a promotional campaign after 50 cases were linked to one of its stores outside of Seoul.

Starbucks’ Korean business was a bright spot for the U.S. coffee chain, with the joint venture posting a profit surge in the April-June quarter as the country quickly brought the COVID-19 outbreak under control.

But South Korea is battling a resurgence in virus cases in Seoul and surrounding areas, with the largest outbreak connected with a church and smaller outbreaks linked to cafes, restaurants and other places.

South Korean health authorities are investigating how the virus spread at a Starbucks outlet in the border city of Paju, and have said infected people were not wearing masks and fresh air may not have been properly circulated.

“What happened at the Starbucks store in Paju was much expected,” said Yang Sae-rom, a 30-year-old office worker outside a busy Starbucks in Seoul. “They should have advised customers to wear masks and drawn fresh air in more often.”

Starbucks Korea, a joint venture between Starbucks and Korean retail giant E-Mart Inc, said it has reduced seating capacity by more than 30% in all its stores in Seoul and nearby areas after authorities on Sunday reimposed tighter social distancing curbs.

The coffee chain said it would also enhance hygiene rules across all stores, recommend customers wear face masks and had delayed a promotional campaign offering toy figures.

“I think the place remains exposed to risks, because there are a lot of people,” said Seo chan-young, a 24-year-old university student, as lunchtime crowds thronged a Starbucks store.

Starbucks has more than 1,400 stores in South Korea, almost as many stores as it has in Japan, which has more than twice the population, according to its website. ($1 = 1,184.6100 won) (Reporting by Hyunjoo Jin and Heekyong Yang; Additional reporting by Sangmi Cha, Dogyun Kim, Daewoung Kim; Editing by Lincoln Feast)

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