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McDonald’s leaving Russia! The fast food chain announces sale of all restaurants in Russia

2022-05-17T19:34:17+00:00
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  • McDonald’s announces the sale of all its restaurants in Russia.
  • The decision follows Russia’s ongoing invasion of Ukraine.
  • McDonald’s owns 850 restaurants in Russia and employs 62,000 people.

Another ‘blow’ for President Vladimir Putin. On Monday, May 16, fast food giant McDonald’s announced the sale of all of its restaurants in Russia due Putin’s ongoing invasion of Ukraine that is causing horrific human and material losses.

ABC News reported that, more than three decades after it became the first American fast-food restaurant to open in the Soviet Union, McDonald’s said Monday that it has begun the process of selling its business in Russia, another symbol of the country’s growing isolation because of the war in Ukraine.

McDonald’s is leaving Russia

McDonald's

The company, which has 850 restaurants in Russia employing 62,000 people, addressed the humanitarian crisis caused by the war by announcing that keeping its business in Russia «is no longer sustainable, nor is it consistent with McDonald’s values,» according to ABC News.

The Chicago-based fast-food giant said in early March that it was temporarily closing its restaurants in Russia but would continue to pay its employees. Without naming a possible Russian buyer, McDonald’s said today that it would look for one that would hire its employees and pay them until the sale was closed, according to ABC News.

«We can’t keep the arches shining there,» McDonald’s said.

Photo: Shutterstock

Chief Executive Officer Chris Kempczinski said the «dedication and loyalty to McDonald’s» of employees and the hundreds of Russian suppliers made the decision to leave a difficult one. «However, we have a commitment to our global community and must remain steadfast in our values.» He added in a statement, «And our commitment to our values ​​means we can no longer keep the arches shining there.»

As it tries to sell its restaurants, McDonald’s said it plans to start removing the golden arches and other symbols and signs bearing the company’s name, and that it will keep its trademarks in Russia. ABC News reported that Western companies have struggled to get out of that nation, taking a hit to their bottom lines by halting or shutting down their operations in the face of sanctions. Others have remained in Russia, at least partially, and some have faced the consequences.

Renault also made an announcement

Renault also made announcement about Russia

French carmaker Renault said on Monday it would sell its majority stake in Russian carmaker Avtovaz and a factory in Moscow to the state, the first major nationalization of a foreign company since the war began.

For McDonald’s, its first restaurant in Russia opened in the heart of Moscow more than three decades ago, shortly after the fall of the Berlin Wall. It was a powerful symbol of the easing of Cold War tensions between the United States and the Soviet Union, which would collapse in 1991. Now the departure of the company is proving symbolic of a new era, analysts say, according to ABC News.

Russia is becoming more and more isolated

Russia is becoming more and more isolated
Photo: Getty Images

“Their departure represents a new isolationism in Russia, which must now look inward for investment and development of consumer brands,” said Neil Saunders, managing director of GlobalData, a corporate analysis company quoted by ABC News.

Saunders added that McDonald’s owns most of its restaurants in Russia, but since it won’t license its brand, the selling price probably won’t come close to what the business was worth before the invasion. Russia and Ukraine together accounted for about 9% of McDonald’s revenue and 3% of operating income before the war, he said. McDonald’s said it expects to record a charge against earnings of between $1.2 billion and $1.4 billion for leaving Russia.

The post McDonald’s announces sale of all its restaurants in Russia for unleashing war appeared first on Mundo Hispanico.

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Economy
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