According to data released Wednesday by AI analytics firm IGAWorks’ Mobile Index, Starbucks Korea’s weekly payment volume fell to 23.69 billion won ($17.3 million) between May 18 and 24, down 26.3 percent from 32.16 billion won the previous week. The figure was also roughly 25 percent lower than the May 4-10 period.
The U.S. coffee brand is South Korea’s largest coffee franchise, with annual sales exceeding 3 trillion won.
New installations of the Starbucks app also dropped 23.6 percent over the same period to 36,994, with the brand falling from second to fifth place among food-and-beverage apps in weekly downloads.
The data added to signs that the controversy has begun affecting consumer sentiment and brand trust, even as overall app users increased temporarily amid heightened public attention and customers checking notices, coupons and rewards balances.
Executives also acknowledged the financial impact. Jeon Sang-jin, executive vice president overseeing corporate management, said sales had fallen “considerably” since the controversy, although the company declined to disclose specific figures. He said restoring public trust remained the priority.
Amid deepening criticism, Shinsegae Group Chairman Chung Yong-jin on Tuesday delivered a second public apology in a nationally televised appearance, repeatedly bowing and pledging to rebuild trust “through actions, not words” following what the group described as a serious lapse in historical awareness.
“I will not make any excuses. This is my fault,” Chung said during the five-minute apology. “We will regain the public’s trust not through words, but through actions.”
The controversy erupted after Starbucks Korea promoted tumblers branded with the word “Tank” on May 18, the anniversary of the 1980 Gwangju Democratization Movement. Critics also condemned the use of the phrase “Tak! on the desk,” saying it evoked the infamous explanation once used to conceal the 1987 torture death of student activist Park Jong-chul.
As public anger intensified, Starbucks Korea also temporarily eased refund rules for its prepaid Starbucks cards. The company said customers will be allowed to request full refunds on card balances regardless of usage conditions for two weeks from June 1 through June 14.
Under existing terms, customers could only receive refunds after using at least 60 percent of the balance. Starbucks Korea said the temporary exception was introduced in response to growing refund demands following the controversy.
The backlash has also spread to online gift-card platforms. Starbucks gift certificates, long among the most popular products on KakaoTalk Gift, fell from the top two spots to sixth place in the platform’s exchange-voucher rankings over the weekend amid boycott campaigns linked to the controversy.
Delivery app vouchers, Shinsegae gift certificates and Olive Young gift cards overtook Starbucks in the rankings. Starbucks products, however, still held the top three positions within KakaoTalk’s separate “cafe” category, indicating the brand retained substantial core demand despite the controversy.
What initially appeared to be a marketing blunder rapidly escalated into one of the most serious reputational crises in Shinsegae Group’s recent history, triggering boycott campaigns, police complaints and criticism from political leaders, including President Lee Jae Myung.
Copyright ⓒ Aju Press All rights reserved.
