McDonald’s says it will sell its Russia business after previously pausing operations due to Ukraine war

McDonald’s says it will sell its Russia business after previously pausing operations due to Ukraine war


A view shows a McDonald’s restaurant in Saint Petersburg, Russia March 8, 2022.

Anton Vaganov | Reuters

McDonald’s said Monday that it would sell its business in Russia, a little more than two months after it paused operations in the country due to its invasion of Ukraine.

“The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values,” the company said in a news release. Russian forces, directed by President Vladimir Putin, have been accused of an array of war crimes during their assault on Ukraine.

McDonald’s exit from Russia is a bitter end to an era that once promised hope. The company, among the most recognizable symbols of American capitalism, opened its first restaurant in Russia over 32 years ago as the communist Soviet regime was falling apart and Western businesses and ideas infiltrated the Iron Curtain. Hundreds of people lined up to get a chance to sample McDonald’s burgers and fries at the Pushkin Square location in Moscow.

“If you can’t go to America, come to McDonald’s in Moscow,” was a McDonald’s ad slogan at the time in Russia, according to The Washington Post.

Now, McDonald’s has more than 800 restaurants and 62,000 employees in Russia. The company said it is seeking a local buyer.

“We have a commitment to our global community and must remain steadfast in our values,” McDonald’s CEO Chris Kempczinski said in Monday’s release. “And our commitment to our values means that we can no longer keep the Arches shining there.”

McDonald’s announcement Monday is a stark indication of how much the Western world has turned against Putin’s regime. At first, following Russia’s invasion of Ukraine, McDonald’s kept silent about the attack. Then, after public outcry and pressure, McDonald’s and major U.S. brands such as Starbucks and Coca-Cola paused their business in Russia.

McDonald’s said Monday that it would start the process of “de-Arching” restaurants in Russia, meaning it would remove its name, logos, menus and branding from those locations. It will retain its trademarks in Russia, however, the company added.

The company also said it would attempt to make sure its employees in the country would continue getting paid until a deal closes, and that it would attempt to help them hold on to their jobs under the new owners.

McDonald’s said its restaurants in Ukraine, which has been under attack by Moscow’s forces since late February, remain closed. The company said it is continuing to pay full salaries to its employees in that country, as well.

Russia and Ukraine had accounted for about 2% of McDonald’s systemwide sales, and approximately 9% of its revenue and 3% of its operating income.

McDonald’s said it expects to record a primarily non-cash charge of about $1.2 billion to $1.4 billion related to its decision to leave the Russian market. In March, the company said its temporary shutdown would cost it about $50 million a month, or 5 cents to 6 cents per share.



Source

The U.S. now has a third of the world’s millionaires and billionaires
Business

The U.S. now has a third of the world’s millionaires and billionaires

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox. The U.S. now accounts for more than a third of the world’s millionaires and billionaires, as tech companies and startups mint […]

Read More
Dick’s Sporting Goods stands by full-year guidance — even with tariffs looming
Business

Dick’s Sporting Goods stands by full-year guidance — even with tariffs looming

A sign is posted in front of a Dick’s Sporting Goods store on September 04, 2024 in Daly City, California.  Justin Sullivan | Getty Images Dick’s Sporting Goods said Wednesday it’s standing by its full-year guidance, which includes the expected impact from all tariffs currently in effect. The sporting goods giant said it’s expecting earnings […]

Read More
Hybrid leader Toyota targets major growth in plug-in vehicles amid industry’s EV uncertainty
Business

Hybrid leader Toyota targets major growth in plug-in vehicles amid industry’s EV uncertainty

2023 Prius Prime on display, April 6, 2023. Scott Mlyn | CNBC PLANO, Texas — Twenty-five years after introducing many Americans to hybrid vehicles with the Prius, Toyota Motor is targeting significant growth in plug-in hybrid electric vehicles, or PHEVs. Such vehicles can function as an all-electric vehicle for a certain number of miles before […]

Read More