McDonald’s sells Russia business after it shut down due to the Ukraine war
A view shows a McDonald’s restaurant in Saint Petersburg, Russia, March 8, 2022.
Anton Vaganov | Reuters
McDonald’s said Monday it was selling its business in Russia, just over two months after it suspended operations in the country over its invasion of Ukraine.
“The humanitarian crisis caused by the war in Ukraine and the resulting unpredictable operating environment have led McDonald’s to conclude that continuing operations in Russia is no longer viable and inconsistent with McDonald’s values,” das said company in a press release. Russian forces led by President Vladimir Putin have been accused of a series of war crimes during their attack on Ukraine.
McDonald’s exit from Russia marks the bitter end of an era that once promised hope. The company, one of the most recognizable symbols of American capitalism, opened its first restaurant in Russia over 32 years ago, just as the Soviet communist regime was falling apart and Western companies and ideas were infiltrating the Iron Curtain. Hundreds of people lined up to try McDonald’s burgers and fries in Moscow’s Pushkin Square.
“If you can’t go to America, come to McDonald’s in Moscow,” was a McDonald’s advertising slogan in Russia at the time, according to the Washington Post.
McDonald’s now has more than 800 restaurants and 62,000 employees in Russia. The company said it was looking for a local buyer.
“We are committed to our global community and must remain steadfast in our values,” McDonald’s CEO Chris Kempczinski said in Monday’s press release. “And our commitment to our values means we can no longer let the arcs shine there.”
McDonald’s announcement on Monday is a clear indication of how much the Western world has turned against Putin’s regime. After Russia invaded Ukraine, McDonald’s initially remained silent on the attack. Then, after public outcry and pressure, McDonald’s and big US brands like Starbucks and Coca-Cola went out of business in Russia.
McDonald’s said Monday it would begin the process of “de-arching” restaurants in Russia, meaning it would remove its name, logos, menus and branding from those locations. However, it will keep its brands in Russia, the company added.
The company also said it will try to ensure its employees in the country continue to be paid until a deal is completed and it will try to help them keep their jobs under the new owners.
McDonald’s said its restaurants will remain closed in Ukraine, which has been under attack by Moscow’s forces since late February. The company said it continues to pay its employees full salaries in that country as well.
Russia and Ukraine accounted for about 2% of McDonald’s systemwide sales, as well as about 9% of sales and 3% of operating income.
McDonald’s said it expects a primarily non-cash charge of about $1.2 billion to $1.4 billion related to its decision to exit the Russian market. In March, the company said its temporary shutdown would cost it about $50 million a month, or 5 to 6 cents a share.
https://www.cnbc.com/2022/05/16/mcdonalds-says-it-will-sell-its-russia-business-after-previously-pausing-operations-due-to-ukraine-war.html McDonald’s sells Russia business after it shut down due to the Ukraine war