More than 30 years later, McDonald’s is leaving Russia forever

McDonald's is located in Pushkin Square and first opened in Moscow on March 13, 2022, in January 1990, just before the collapse of the Soviet Union.
McDonald’s was first opened in Moscow on March 13, 2022, in Pushkin Square, in January 1990, just before the collapse of the Soviet Union (-/ AFP / Archives).

Symbol of the end of the Cold War leaves Moscow: McDonald’s announced on Monday that it would withdraw completely from the country in response to the invasion of Ukraine and sell its activities after having existed in Russia for more than 30 years.

“Due to the humanitarian crisis caused by the war in Ukraine and the resulting unpredictable economic environment, McDonald’s business continuity in Russia is no longer sustainable and inconsistent with our values. I conclude, “the American giant said in a statement.

On March 8, the company announced the temporary closure of the restaurant and the suspension of operations in the country, following in the footsteps of other multinational companies away from Moscow.

Like other brands that symbolize American culture around the world, such as Coca-Cola and Starbucks, fast food chains have been boycotted on social networks.

“We are committed to the global community and we must continue to adhere to our values,” said Chris Kempczinski, Group Chief Executive Officer, in a statement. ..

850 restaurants

McDonald’s opened its first restaurant in Moscow in January 1990, less than two years before the collapse of the Soviet Union.

The chain currently has approximately 850 offices and 62,000 employees in the country. More than 80% of the restaurants bearing his name are directly managed by the group, with Russia accounting for about 9% of total sales and 3% of operating profit in 2021.

McDonald's was just a stone's throw from the Moscow Kremlin on March 10, 2022.
McDonald’s was just a stone’s throw from the Moscow Kremlin on March 10, 2022 (-/ AFP / Archives).

The company is trying to resell its entire Russian portfolio to local players, but has not yet named the buyer. McDonald’s names, logos and menus may not be used by those who take over the activity.

McDonald’s promises to continue paying its employees until the transaction is completed and wants to ensure that future acquirers will continue to be employed.

The group plans to record $ 1.2 billion to $ 1.4 billion in costs in the account due to the withdrawal from the country.

“Given the sale situation, the financial difficulties facing potential Russian buyers, and the fact that McDonald’s does not license its brand or identity, the sale price could approach the book value of the company before the invasion of Ukraine. The sex is low. ” Global Data’s Neil Saunders said.

– “new era”-

“Almost half a century after the hostility of the Cold War, the image of the golden arch illuminating Pushkin Square represented the beginning of a new era to many on both sides of the Iron Curtain,” Kempchinsky told the entire McDonald’s community. I explained in a letter.

It was a big event for the Soviet Union, who was completely confused under perestroika at the time.

In the years and decades that followed, the group expanded to several other Russian cities, from Kaliningrad to Vladivostok via St. Petersburg and Nizhny Novgorod.

McDonald's closed in Moscow on March 16, 2022
McDonald’s (-/ AFP / Archives) closed in Moscow on March 16, 2022

“McDonald’s and Russia are so intertwined that one seems unimaginable without the other,” Kemptinsky summed up. “Still, unfortunately, that’s where we came today.”

Like many other Western companies, restaurants withdraw from the country because of humanitarian considerations and criticism of Russian military action, as well as the increasing difficulty of running a business properly. I decided to do it.

“McDonald’s has decided that it’s better to leave the country altogether than to deal with ongoing uncertainties about when to resume operations,” said Neil Sanders, who could follow other brands. I predicted that there would be.

Similarly, French car maker Renault transferred its assets to Russia on Monday. In short, it is the majority stake in the group that manufactures Lada cars and marked the first major nationalization since the beginning of the Ukrainian conflict.

McDonald’s withdrawal from Russia “is not an easy decision and will not be easy to implement given the size of our business and the current difficulties of doing business in Russia,” Kempchinsky said. Guaranteed.

But he said the group wouldn’t rethink his choice.

■■