McDonald’s withdraws entirely from Russia

The American fast food group announced Monday May 16 that it was completely leaving the country of Vladimir Putin, where it employs more than 60,000 employees, due to the invasion of Ukraine by Moscow.


The golden arches will disappear from Russian urban landscapes. McDonald’s announced on Monday, May 16, his decision to leave Russia. The communication of the American giant has taken the form of a letter sent by its CEO, Chris Kempczinski at the “Global McFamily”. The opportunity to recall that the world leader in fast food had settled in this country thirty-two years ago. The first highly publicized opening of an establishment Place Pouchkine, in Moscow, in January 1990, in what was still the USSR, had aroused a strong crowd of customers wishing to offer their first hamburger “Made in USA”. A symbol of the end of the Cold War.

Since the trigger of the invasion of Ukraine by Russian troops, on February 24, McDonald’s, as many foreign companies, was faced with the question of the attitude to adopt. At the end of February, the fast food brand suspended its activities in Ukraine and then on March 8, it decided to do the same in Russia. She then explained to temporarily close the doors of restaurants in place. A position that touched the establishments it holds in its own.

Usually, McDonald’s international development strategy is primarily based on a franchise model. However, in Russia, the American company has largely deployed its own establishments. Of the 850 restaurants it claims in this country, less than 20 % would be in the hands of franchisees. The latter therefore sometimes made the choice to continue the activity despite taking up the parent company. It was therefore still possible to consume Big Macs in Russia.

In March, “we have hope that peace quickly returns to the region,” said Kempzinski, in his mail. Las, two months later, the American giant takes a new step. Its intention is now to completely dismantle the brand with golden arches throughout Russian territory, from Saint-Petersburg to Moscow, via Nijni Novgorod and Vladivostok, and to stop any marketing of McDonald’s menus and products. However, he will keep the brand’s property. The company therefore claims to sell all of its restaurants and ensure the remuneration of more than 60,000 employees until the transaction. 2>

load between 1.2 and 1.4 billion Dollars

This withdrawal from a major country, described as first in the history of the company, has a cost. McDonald’s estimates that he will have to register in his accounts a charge between 1.2 and $ 1.4 billion (1.15 to 1.34 billion euros). In the financial press release published in April relating to the activity of the first quarter of 2022, the American giant had estimated at 27 million dollars (25.9 million euros) the cost of wages and other payments due to suppliers as a result of The suspension of its activity in Russia and Ukraine over this period. To this were added an amount of $ 100 million (95.9 million euros) linked to losses in the supply chain.

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/Media reports.