Starbucks saw a decline in payment volume following the so-called "Tank Day" controversy, but reclaimed the top sales spot on "KakaoTalk Gifting," revealing a gap between consumer behavior and public sentiment.
Starbucks recorded estimated credit and debit card payments of 121.19 billion won last month, according to Mobile Index, a platform operated by artificial intelligence (AI) data firm IGAWorks, on Friday. This represents a decline of about 13.1 billion won from 134.32 billion won in April.
The drop in payments also continued on a weekly basis. Starbucks's weekly payments stood at 32.16 billion won during May 11-17, but fell to 23.69 billion won during May 18-24 when the controversy erupted, and declined again to 21.46 billion won during May 25-31. The figure fell for two consecutive weeks.
The controversy stemmed from Starbucks Korea's use of the term "Tank Day" during a tumbler discount event on May 18. Critics said the term was inappropriate as it coincided with the anniversary of the May 18 Democratization Movement, and posts verifying boycotts, card cancellations, and gift voucher refunds spread across online communities and social networking services (SNS). As the controversy widened, Shinsegae Group moved to contain the situation, replacing the CEO of Starbucks Korea and issuing an official apology. Starbucks also began offering refunds on prepaid card balances this month to appease consumer complaints.
However, signs of recovery have emerged in some segments of the consumer market. As of the previous day, the 50,000-won Starbucks e-card ranked No. 1 in sales in the cafe category on KakaoTalk Gifting. Starbucks had ceded the top spot to a competing brand immediately after the controversy, but regained the No. 1 position in about a week. The 30,000-won e-card and beverage-and-dessert set products also ranked among the top sellers.
The industry views Starbucks's network of more than 2,000 stores nationwide, high brand recognition, and ease of use as factors that still make it a "safe gift." Some analysts say a partial divergence is emerging between critical online sentiment and actual consumer behavior.
