Global food brand, McDonald’s, has now announced that it will permanently leave Russia after operating for 30 years, as it has already started selling off its restaurants there.
The move came after the company temporarily closed its 850 outlets there in March 2022. According to the fast-food giant, it made the decision because of the “humanitarian crisis” and “unpredictable operating environment” triggered by the ongoing Russia-Ukraine war. McDonald’s opened in Moscow in 1990, in a period when the Soviet Union decided to open its economy to Western brands and now, its total exit will carry symbolic weight.
The company also made it known that it is now pursuing the sale of all its restaurants in Russia to a local buyer and intend to start the process of “de-arching” the sites so they no longer use the McDonald’s name, branding and menu. However, it pointed out that it would continue to keep the company’s trademarks in Russia.
What is McDonald’s Reason(s)?
McDonald’s averred owning a business in Russia is “no longer tenable” or consistent with its values. It continued to say that its priorities included seeking to ensure its 62,000 employees in Russia continued to be paid until any sale was completed. It further added that employees have “future employment with any potential buyer”. McDonald’s President and Chief Executive, Chris Kempczinski, said the announcement is “extremely difficult” but it wanted to stick to its values.
“Our commitment to our values means that we can no longer keep the Arches shining there.”McDonald’s President and Chief Executive, Chris Kempczinski
McDonald’s decision to exit its operations in Russia came after French carmaker, Renault announced that it has sold its Russian assets to the Russian government, marking the first major nationalization of a Western company’s assets since Moscow threatened to punish those leaving the country over the invasion of Ukraine.
Last year (2021), Russia and Ukraine accounted for about 9% of McDonald’s global sales. The chain’s 108 restaurants in Ukraine remain closed due to the conflict but the company is continuing to pay full salaries to all of its employees there. McDonald’s initially faced criticism for being slow to halt its business in Russia, with some calling for a boycott of the company before it suspended operations in March 2022.
Which Other Brands Have Left or Suspended Operations?
Hundreds of international brands, including Starbucks, Coca Cola, Levi’s and Apple, have left Russia or suspended sales there since the country’s invasion on Ukraine began on Thursday, February 24, 2022. But on the other hand, firms, including Burger King and Marks and Spencer, said they are unable to close stores due to complex franchise deals.