SEOUL, October 11 (AJP) - Card spending at Starbucks in South Korea climbed back to first place among coffee chains in September, five months after a promotion that recalled the bloody 1980 crackdown in Gwangju set off a nationwide boycott.
Starbucks Korea took in an estimated 121.08 billion won ($90.1 million) in credit and debit card payments last month, according to Mobile Index, a data service run by IGAWorks, released Sunday. That was up 4.3 percent from August and marked a third straight monthly gain since spending hit bottom at 100.39 billion won in June.
However, the coffee franchise has not fully recovered. September spending was still 9.9 percent below April, the last full month before the controversy. Rival coffee shop brand A Twosome Place slipped 6.4 percent to 110.5 billion won. It had outsold Starbucks every month from May through August, the first time it had done so in at least three years.
The trouble began on May 18, the anniversary of the Gwangju Uprising. To promote a line of "Tank" tumblers, the Starbucks Korea app labeled the day "Tank Day" and ran a slogan that read "Tak! on the desk," using a Korean word for the sound of something striking a hard surface.
In May 1980, residents of Gwangju rose up against martial law imposed by army general Chun Doo-hwan, who had seized control of the military months earlier. Troops backed by tanks retook the city after 10 days, and a state truth commission later counted 166 people killed. Chun, who became president that year, was convicted of mutiny and treason in 1996.
The slogan echoed the 1987 death of Seoul National University student Park Jong-chul in police custody. Police first claimed that Park collapsed when an investigator slammed the desk. It later emerged that he had been tortured, and the cover-up helped fuel the protests that won direct presidential elections.
The uprising has also long been a target of distortion. Chun's government branded it a riot. For decades, far-right commentators claimed that North Korean special forces had incited it, a theory the truth commission said in its 2024 final report had no basis.
Many consumers read the campaign against the politics of the man at the top. Starbucks Korea is operated by SCK Company, which is 67.5 percent owned by E-mart, the flagship retailer of Shinsegae Group, led by Chairman Chung Yong-jin. In late 2021 and early 2022, Chung repeatedly posted "Myeolgong," a Cold War slogan meaning "eradicate communism," to his Instagram account. Shares of Shinsegae Inc. fell 6.8 percent on Jan. 10, 2022, at the height of that dispute.
President Lee Jae Myung said in a post on X on the evening of May 18 that those responsible should face "moral, administrative, legal and political responsibility." Kim Tae-chan, vice president of an association of people wounded in the uprising, pointed to Chung's past remarks and suggested the promotion might have been deliberate. Shinsegae said Chung had not known about the campaign.
Customers posted videos of themselves smashing Starbucks mugs, deleted the app and asked for refunds on gift vouchers. Weekly card spending at the chain fell by a third between the week before the anniversary and the last week of May. Some right-leaning internet users answered with a counter-campaign, posting their Starbucks purchases tagged "myeolgong."
Chung dismissed Starbucks Korea CEO Son Jung-hyun and the executive in charge of the promotion on the night of May 18, and apologized in person at a press conference on May 26. The chain suspended its summer launches and promotions, then began bringing back new products and customer benefits in stages from July.
Card data captures only part of Starbucks' business. Mobile Index estimates exclude cash, gift vouchers, mobile payment services and the prepaid Starbucks Card, which the chain's customers use heavily.
On reported revenue, the gap between the two rivals is far wider. SCK Company posted 3.24 trillion won in revenue last year, more than five times A Twosome Place's 582.4 billion won.
AJP Takeaways
- Starbucks Korea took in an estimated 121.08 billion won in credit and debit card payments in September, retaking first place among South Korean coffee chains from A Twosome Place, which had led every month from May through August after the May 18 "Tank Day" promotion that recalled the 1980 Gwangju crackdown.
- Shinsegae Group Chairman Chung Yong-jin, whose 2021 and 2022 "destroy communism" Instagram posts led a representative of people wounded in the uprising to suggest the promotion might have been deliberate, dismissed the Starbucks Korea CEO on May 18 and apologized at a May 26 press conference, though the group said he had not known about the campaign.
- IGAWorks' Mobile Index figures show September card spending at Starbucks Korea still 9.9 percent below April, the last full month before the controversy, a comparison AJP drew from earlier monthly Mobile Index releases rather than from the September data alone.
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