Should we stay or should we go?
Many foreign businesses decided to shutter their operations in Russia following its Feb. 24 invasion of Ukraine. Others have chosen to remain despite negative media coverage, citing various legal and moral obligations.
Morning Consult Brand Intelligence, our state-of-the-art brand research and analysis technology, tracks U.S. consumer sentiment toward 114 brands included on a comprehensive and well-regarded list of companies’ withdrawal status. Using this list as a guide, we group companies based on their withdrawal status and examine U.S. consumers’ average favorability toward each cohort before and after the invasion, offering the first systematic look at whether consumers are broadly penalizing companies that remained in Russia and rewarding those that left.
Politically-engaged U.S. consumers are paying attention
U.S. consumers overwhelmingly want companies to withdraw from Russia (per our latest briefing). The average U.S. consumer — assessed among a general population adult audience — does not always seem to follow through when it comes to favorability: On average, U.S. consumers writ large did not especially reward companies that withdrew from Russia with a boost in net favorability (the share of respondents with a favorable view minus the share with an unfavorable view), nor did they dramatically penalize companies that remained.
U.S. consumers among a general population audience were asked about their favorability toward brands that withdrew from or remained in Russia
But among politically-engaged U.S. adults — an audience of informed consumers who pay substantial attention to public affairs and politics, and who are registered to vote — the risks of staying in Russia are unavoidable. From late December through mid-April, companies that stayed in Russia saw an average 8 percentage point decrease in net favorability among politically-engaged consumers. While companies that withdrew also saw their average net favorability decrease — likely driven by some companies’ delayed decisions about whether to withdraw in the days immediately following the invasion — the decline was substantially smaller, at 5 percentage points. On average, politically-engaged consumers similarly penalized companies that chose an intermediate path, but never as severely as companies that remained.
Politically-engaged U.S. consumers were asked about their favorability toward brands that withdrew from or remained in Russia
Geographic and emotional proximity to the crisis can drive even more severe hits to companies’ favorability
The relatively muted change in favorability among the average U.S. consumer regardless of companies’ withdrawal status also masks a key dimension of the brand-consumer sentiment nexus: how directly a particular group of consumers is affected by the geopolitical issue at play. Specifically, our data suggests that negative responses to brands that stayed in Russia are amplified as a function of consumers’ closeness to the conflict, both geographically and emotionally, and demonstrates that negative responses are more prevalent among the average European consumer in certain markets, placing their behavior on par with that of politically-engaged U.S. consumers.
To establish this, we identified two European markets where the crisis has been especially salient — Poland and the Czech Republic — and compared local consumers’ favorability of five companies still operating in Russia with that of six brands that withdrew (comprising the set of companies we track regularly in both markets at present).
In both markets, consumers systematically punished the companies that stayed in Russia after the February invasion, with the largest decreases observed in Poland, a country that has received more Ukrainian refugees than the rest of Europe combined. On average, the five companies that remained in Russia have seen an 8 percentage point drop in net favorability in Poland, and at least one company that received negative media coverage because of its decision to stay saw a drop in favorability of 29% between February and April. Declines in favorability toward companies that stayed in Russia were slightly more subdued, but still noteworthy, in the Czech Republic — a former Soviet satellite state where the conflict has also been acutely felt. By contrast, companies that withdrew from Russia saw their favorability remain steady in both countries. These dynamics underscore the lasting risks that heightened issue salience among consumers can pose to companies that decide to weather the storm.
Net favorability of companies that stayed in Russia dropped among Polish and Czech adults
When salience is high, companies should remain cautious
For the average U.S. consumer, our data suggests companies’ brand favorability won’t always change dramatically based on their responses to Russia’s invasion of Ukraine. But politically-engaged U.S. consumers are more sensitive to companies’ withdrawal status; presumably, they are also more likely to actively seek out opportunities to draw attention to companies’ decisions to stay put, compounding the risks for ones that serve the U.S. market. Risks to reputation are further magnified when awareness is high, whether due to focused media attention on a particular company or among consumer groups who feel the effects of Russia’s invasion of Ukraine more directly, such as among consumers in Eastern Europe.
As these findings indicate, the safest option for Western companies is still to withdraw from Russia. Barring that, companies will need to go to great lengths to justify their course of action in markets close to the conflict, and especially when they find themselves in the media spotlight. While companies cannot necessarily predict negative coverage, our data suggests they should routinely anticipate heightened consumer salience as a function of proximity to the crisis, whether due to geography or other reasons, and they should tread especially carefully when large regional markets like Poland are at stake.