Mcdonald’s To Leave Russia After 30 Years
Following the invasion of Ukraine, McDonald’s Corp became one of the largest global companies to leave Russia; it announced plans to sell all of its restaurants after operating in the nation for more than 30 years.
Following the sale, the world’s largest burger company, which owns around 84 percent of its almost 850 outlets in Russia, will face a non-cash loss of up to $1.4 billion. McDonald’s (NYSE: MCD) announced in March that it would close all of its restaurants in the nation; this includes the landmark Pushkin Square facility in downtown Moscow; which served as a symbol of thriving American capitalism in the latter days of the Soviet Union. Even though the cost of a burger was several times more than many city inhabitants’ daily expenditures, the burger business symbolized the easing of Cold War tensions. It offered a vehicle for millions of people to taste Western food and spirit.
Humanitarian Disaster Will Not Be Overlooked
In a letter to staff, Chief Executive Chris Kempczinski said, “Some would argue that giving access to food while employing thousands of regular folks is the correct thing to do.”
“However, it is hard to overlook the humanitarian disaster brought on by the conflict in Ukraine.”
Though most restaurants in Russia have closed, a few franchised locations have remained operational, capitalizing on McDonald’s soaring popularity.
Russia and Ukraine accounted for around 9% of the company’s sales last year, or $2 billion. McDonald’s is considering selling its restaurants in Russia to a local buyer. Still, it will not allow the outlets to use its name, logo, branding, or menu, preserving its trademark. “It (the trademark) allows them to re-enter the market in the long run,” Edward Jones analyst Brian Yarbrough said. The firm stated that it would pay its 62,000 employees in Russia.
Earlier in the day, Renault (EPA: RENA) announced that it would transfer its majority ownership in Avtovaz to a Russian research institute as corporations scurry to comply with sanctions; the company is trying to cope with threats from the Kremlin to confiscate foreign-owned assets. More large brands should follow McDonald’s, according to analysts.
