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McDonald’s Ends Its Three-Decade Long Relationship With Russia

McDonald’s Exits Russia Amid The Russo-Ukrainian War

Highlights:

  • Russians order their last Macs as the burger giant exits Russia altogether
  • McDonald’s culminates its 30-year relationship with Russia in light of the Russo-Ukrainian war.
  • Approximately 84 per cent of the company’s 850 restaurants will be sold to a local buyer and de-Arched following finalisation of the sale.

McDonald’s opened its first restaurant in Moscow in 1990, making its mark as glasnost 30 years ago when it was a part of the Soviet Union but opening up under the rule of Mikhail Gorbachev. Over 30,000 restaurants were opened, and outlets at Pushkin Square remained open beyond the scheduled timings to cater to the vast crowds. Following the Russian invasion of Ukraine, McDonald’s temporarily shut down over 800 outlets in Russia ahead of deciding to conclude its business in the country.

Correspondingly the Russians ordered their last McDonald’s burger in a Moscow train station on Tuesday. Putin’s war on Ukraine was the fundamental reason behind the burger giant shutting down its operations in Russia, terminating a relationship of over 30 years. The humanitarian crisis triggered by the war and the significant uncertainty of the operating environment drove the culmination of the colossal burger chain in Russia. When the war began in March, McDonald’s followed the footsteps of other Western companies, viz. Starbucks, Coca-Cola, etc. and temporarily closed their Russian outlets. Its official exit marks a considerable development in the history of the company, which started as a symbol of American capitalism.

Around 84 per cent of the company’s almost 850 restaurants will be sold to a local buyer who will be barred from using the McDonald’s name, logo, branding, or menu.  Upon finalisation of the sale, the Russian eateries will be de-Arched.

McDonald’s communicated that its employees will be receiving remuneration till the deal closes and that each of them stands a good chance of future employability with any potential buyer. CEO Kris Kempczinski takes pride in the 60,000 workers employed in Russia and maintains that the decision to shut down the chain was inexplicably difficult.

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Nevertheless, the responsibility of adhering to the values of a global community is much larger, which is why the decision was implemented. The shutdown of the chain garnered a barrage of mixed emotions from all over the country. Some travelled long distances just for a lip-smacking meal at the outlet, and others reminisce happily, diving into the chill vibes at the restaurant.

Neil Saunders, Managing Director of GlobalData, said that McDonald’s exit from the country marks novel isolationism in Russia, which should look inward for investment and consumer brand development. McDonald’s will take a colossal write-off (between $1.2 billion to $1.4) from culminating in its Russian business. According to an investor, McDonald’s 850 restaurants in Russia, alongside 108 Ukrainian outlets, accounted for 9% of the company’s revenue in 2021.

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Kumkum Pattnaik
Kumkum’s knack for scrutiny coupled with her passion to serve quality content, has been a constant motivator for her to pursue content writing. In addition to being a ferocious researcher and an inquisitive soul, she firmly believes in making a difference in people’s lives with her articles. When she isn’t scanning the web amassing information, she loves to indulge in yoga or head out for a quick run.
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