After over 30 years of operations McDonald’s Russia, the nation’s very first Western fast food chain to ever open, will officially be selling their Russian business, signaling a era of isolating changes as a response to the war in Ukraine.
The 850 stores being operated in the Eurasian nation will be sold off to other companies, as the corporation stated that working in Russia “is no longer tenable, nor is it consistent with McDonald’s values.”
Back in March the company temporarily closed their operations in Russia. With the intention of eventually returning, they would continue to keep their employees on the pay grade.
“[The] dedication and loyalty to McDonald’s” of employees and hundreds of Russian suppliers made it a difficult decision to leave,” said CEO Chris Kempczinski.
“However, we have a commitment to our global community and must remain steadfast in our values, and our commitment to our values means that we can no longer keep the arches shining there.”
While the brand will keep their Russian trademarks they will begin to remove symbolism associated with their company, including the iconic golden arches, from their locations.
The fast food chain is one of hundreds of Western organizations who have recently halted their operations in Russia as a result of the ongoing war between them and Ukraine. Food brands, car manufacturers, and more have all left the country behind. Earlier this week, Japanese manufacturer Nissan reported struggling profits as their partner Renault sold most of their Russian stakes to AvtoVAZ.
Analyst Neil Saunders, the director of GlobalData, believes the company’s leaving Russia “represents a new isolationism in Russia, which must now look inward for investment and consumer brand development.”
Because McDonald’s hasn’t licensed their Russian chain however, there’s a high chance that their sale price will be low. Only around 5% of the 39,000 worldwide McDonald’s chains are actually owned by the company directly.
Even with the sale of their operations in Russia and halting of their operations in Ukraine the company is hopeful, stating that they plan to add some 1,300 new locations throughout 2022.
The company’s net sales were down $1.5 billion from 2021’s Q1, at $1.1 billion.
See also from Business News:
