“The humanitarian crisis caused by the war in Ukraine and the resulting unpredictable economic environment led McDonald’s to conclude that the continuation of our operations in Russia was no longer tenable or consistent with our values”, indicated the American giant in a statement.
The company announced on March 8 the temporary closure of its restaurants and the suspension of its operations in the country, following in the footsteps of other multinationals distancing themselves from Moscow.
Like other brands that are symbols of American culture around the world, such as Coca-Cola or Starbucks, the fast-food chain was then the subject of a boycott call on social networks.
“We are committed to our global community and must remain adamant about our values,” Group Chief Executive Chris Kempczinski said in the statement.
– 850 restaurants –
McDonald’s opened its first restaurant in Moscow in January 1990, just under two years before the collapse of the USSR.
The chain now has around 850 establishments and 62,000 employees in the country. More than 80% of the restaurants bearing his name there are directly managed by the group, for which Russia represented in 2021 around 9% of its total turnover and 3% of its operating profit.
The company is seeking to resell its entire Russian portfolio to a local player but has not yet given the name of a buyer. Anyone who takes over the activity will not be able to use the name, logo or menus of McDonald’s.
Until a transaction is finalized, McDonald’s is committed to continuing to pay its employees and wants to ensure that they continue to be hired by the future acquirer.
The group will record in its accounts a charge of between 1.2 billion and 1.4 billion dollars due to its withdrawal from the country.
“Given the circumstances of the sale, the financial difficulties facing potential Russian buyers and the fact that McDonald’s will not license its brand or identity, the sale price is unlikely to come close to the book value of the company before the invasion of Ukraine,” said Neil Saunders of GlobalData.
– “New era”-
“After nearly half a century of Cold War animosity, the image of the Golden Arches beaming over Pushkin Square represented for many on both sides of the Iron Curtain the beginning of a new era,” Kempczinski described in a letter to the entire McDonald’s community.
It was then a major event for the Soviets in full turmoil under perestroika.
The group expanded in the following years and decades to several other Russian cities, from Kaliningrad to Vladivostok via Saint Petersburg and Nizhny Novgorod.
“McDonald’s and Russia have become so intertwined that it seems impossible to imagine one without the other,” Kempczinski summed up. “And yet, unfortunately, that’s where we’ve come to today.”
Like many other Western businesses, the restaurateur decided to withdraw from the country, citing in addition to humanitarian considerations and condemnation of Russian military actions, the increasing difficulty of operating the business normally.
“McDonald’s has decided that it is better to leave the country altogether rather than deal with continued uncertainty about when to resume operations,” Neil Saunders said, predicting that other brands could follow.
The French car manufacturer Renault in the same vein ceded its assets to Russia on Monday, namely its majority stake in the group that manufactures Lada cars, marking the first major nationalization since the start of the Ukrainian conflict.
Mr. Kempczinski assured that the departure of McDonald’s from Russia “was not an easy decision and will not be easy to implement given the size of our business and the current difficulties of operating in Russia”.
However, he said the group would not reconsider his choice.