mcdonald’s in russia, After 30 years, McDonald’s will leave Russia permanently.

Mcdonald’s in Russia

The action follows the temporary closure of 850 stores in March.

The fast food behemoth claimed it decided because of the “humanitarian crisis” and “unpredictable operational environment” of the Ukraine conflict.

In 1990, the first McDonald’s in Russia restaurant opened in Moscow, symbolizing a thaw in Cold War tensions.

The Soviet Union disintegrated a year later, and Russia opened its economy to Western corporations. However, more than three decades later, it is one of many companies withdrawing.

In a memo to employees and suppliers, McDonald’s in Russia CEO Chris Kempczinski said, “This is a hard subject with no precedent and deep ramifications.”

“Some could argue that continuing to employ tens of thousands of ordinary individuals while giving access to food is clearly the correct thing to do,” he continued.

McDonald’s in Russia

“However, the humanitarian situation generated by the war in Ukraine cannot be overlooked. And it’s difficult to picture the Golden Arches symbolizing the same hope and promise that drove us to enter the Russian market 32 years ago.”

McDonald’s in Russia

mcdonald's in russia
mcdonald’s in russia

McDonald’s announced that it would sell all of its locations to a local buyer and begin the process of “de-arching” the restaurants, which entails removing the company’s name, branding, and menu. However, in Russia, it will keep its trademarks.

The firm stated that one of its top concerns was to ensure that its 62,000 Russian employees were paid until the sale was completed and that they have “future employment with any potential buyer.”

McDonald’s said it would write off up to $1.4 billion (£1.1 billion) in charges to finance the departure from its investment.

This is indeed the end of an era. When the first Russian McDonald’s opened in Moscow’s Pushkin Square in January 1990 – way back in the Soviet Union – I was in line.

It took three hours to get inside the restaurant since so many people were outside. But what a rush of adrenaline.

Moscow’s embrace of the West was symbolized by those American burgers, fries, and pies. Hot food to aid in the conclusion of the Cold War.

Mcdonald’s in Russia

This is a vastly different era. Russia and the West have lost interest in each other.

International censure and sanctions have followed Russia’s war on Ukraine, making it a pariah state.

Meanwhile, as usual, the Kremlin throws the finger at the West, accusing it of plotting Russia’s demise.

In March, many international corporations stated that they were halting activities in Russia in the hopes that the crisis would settle itself and that they could reopen.

However, McDonald’s in Russia’s decision to sell and withdraw demonstrates that the fast food giant recognizes that things will not return to normal. Moreover, the Kremlin’s “special military operation” in Ukraine has permanently altered the situation.

Big Macs are just the start. I believe that many more international brands will leave Russia.

The action follows Renault’s announcement that it would be selling its operations in the country. The French company said it would sell its 68 percent stake in Avtovaz to a Russian science institute, while its shares in Renault Russia would go to Moscow.

According to Moscow, Renault’s Russian assets have now become state property, marking the first significant foreign company to be nationalized since the invasion of Ukraine.

Russia and Ukraine accounted for around 9% of McDonald’s global sales last year.

mcdonald's in russia
mcdonald’s in russia

Due to the crisis, the chain’s 108 restaurants in Ukraine remain shuttered, although the company continues to pay all of its employee’s full salaries.

Before suspending operations in March, McDonald’s drew criticism for being hesitant to stop doing business in Russia, with some advocating for a boycott.

Since Russia invaded Ukraine in February, hundreds of foreign brands have departed or ceased sales in the country, including Starbucks, Coca-Cola, Levi’s, and Apple.

For example, Burger King and Marks and Spencer say they are unable to close outlets due to complicated franchise agreements.



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