CHICAGO, Tuesday: The greatest institution of American capitalism, McDonald’s, will be closing all its restaurants in Russia in protest at the ongoing war in Ukraine. It has yet to be made clear if the closure will be immediate – or phased in.
McDonald’s was one of the first western brands to open in post-cold war Russia and, in the 1990s, it was seen as a symbol that Russia was finally opening-up to the rest of the world.
However, a decree has now come down from Chicago head office that has said it will now begin “de-Arching” all its restaurants in Russia in a move expected to cost the fast food giant $ US1.4 billion.
In a statement, McDonald’s said: “After more than 30 years of operations in the country, McDonald’s Corporation will exit the Russian market and has initiated a process to sell its Russian business.
“The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.
“It has yet to be made clear if the closure will be immediate – or phased in.”
“We are looking to sell entire portfolio of McDonald’s restaurants in Russia to a local buyer”.
“The Company intends to initiate the process of ‘de-Arching’ those restaurants, which entails no longer using the McDonald’s name, logo, branding, and menu, though the company will continue to retain its trademarks in Russia.”
McDonald’s’ Russian operations account for 9% of the company’s global revenues and 3% of overall profit.
Starbucks, KFC and Pizza Hut have all currently suspended their Russian operations.
McDonald’s is guaranteeing its 62,000 Russian workers employment with the stores’ new owners as part of any sale deal, and pledged to continue paying them until then.
Yet it appears the company hasn’t ruled out a possible return in the future.
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