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Business

McDonald’s sells its Russian business




McDonald’s said on Monday that it has begun the process of selling its Russian business, which includes 850 restaurants that employ 62,000 people, making it the last major Western company to leave Russia since then. invaded Ukraine in February.

The fast-food giant pointed to the humanitarian crisis caused by the war, saying that keeping the business in Russia “is no longer sustainable, nor is it in line with McDonald’s values.”

The Chicago-based company announced in early March that it was temporarily close their stores in Russia but will continue to pay employees. On Monday, it said it would seek to get a Russian buyer to hire these workers and pay them until the sale ends. It did not identify a potential buyer.

CEO Chris Kempczinski said that “the dedication and loyalty of McDonald̵[ads1]7;s” among employees and hundreds of Russian suppliers made it a difficult decision to leave.

“But we have a commitment to our global community and must remain steadfast in our values,” Kempczinski said in a statement, “and our commitment to our values ​​means we can no longer keep our arches shining there.”

While trying to sell their restaurants, McDonald’s said they plan to start removing golden bows and other symbols and signs bearing the company’s name. It said it would keep its trademarks in Russia.

“This was the very best of a series of difficult choices,” James O’Rourke, a professor of management at the University of Notre Dame’s Mendoza College of Business, said in an email. Under this scheme, Russian McDonald’s employees will have a permanent employment future, ordinary citizens will have a largely known place in the neighborhood for a sandwich and a soda, and by “de-arche” the 850 stores in Russia, McDonald’s Corporation will protect the brand and recoup at least some of the capital investment. ”

The first McDonald’s in Russia opened in the middle 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.

McDonald’s was the first American fast food restaurant to open in the Soviet Union, which was to collapse in 1991.


How effective have the sanctions been against Russia?

04:26

McDonald’s decision to leave comes as other US food and beverage giants, including Coca-Cola, Pepsi and Starbucks, have stopped or closed operations in Russia in the face of Western sanctions.

Companies from the British energy giants Shell and BP to the French car manufacturer Renault have withdrawn from Russia, and hit the bottom line when they try to sell their holdings there. Other companies have held back at least in part, with some facing setbacks.

On Monday, Renault handed over its Russian assets to the Kremlin, both parties announced, “which marked the first major nationalization since the start of sanctions over Moscow’s military campaign in Ukraine,” France-Presse said.

McDonald’s said it expects to record a $ 1.2 billion in revenue burden after leaving Russia.

The restaurants in Ukraine are closed, but the company said it continues to pay full wages for its employees there.

McDonald’s has more than 39,000 locations in more than 100 countries. Most are owned by franchisees – only around 5% are owned and operated by the company.

McDonald’s said that leaving Russia will not change the forecast to add a net 1300 restaurants this year, which will contribute about 1.5% to sales growth throughout the company.

Last month, McDonald’s reported $ 1.1 billion in the first quarter, down from more than $ 1.5 billion the year before. Revenue was nearly $ 5.7 billion.



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