After more than 30 years in the country, McDonald’s has announced that it would finally withdraw from operations there and has begun selling its stores.
This decision was made after the company temporarily shuttered all 850 of its stores back in March.
The international chain of fast-food restaurants stated that the decision was made due to the “humanitarian catastrophe” and the “unpredictable operational environment” brought about by the conflict in Ukraine.
The inauguration of the first McDonald’s restaurant in Moscow in 1990 came to be seen as a symbol of a thawing in the tensions of the Cold War.
In the year that followed, the Soviet Union came to an end, and Russia began to welcome business investment from Western nations. However, now, more than three decades later, it is one of an increasing number of firms that are withdrawing from the market.
Chris Kempczinski, the chief executive officer of McDonald’s, communicated in a letter to the company’s employees and its suppliers that “this is a difficult subject that’s without precedent and with deep ramifications.”
He continued by saying that “some would argue that giving access to food and continuing to employ tens of thousands of regular individuals is clearly the right thing to do,” and that this is something that “some might claim might be the right thing to do.”
“It is difficult to turn a blind eye to the humanitarian disaster that has been generated by the conflict in Ukraine. Additionally, it is hard to picture the Golden Arches reflecting the same optimism and promise that prompted our entry into the Russian market 32 years ago.”
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McDonald’s has said that it will sell all of its locations to a local buyer and will start the process of “de-arching” the restaurants, which means that it will remove its name, branding, and menu from the establishments. It will keep ownership of its trademarks in the Russian Federation.
The retail chain has stated that among its top concerns is ensuring that its 62,000 employees in Russia would continue to be paid up until any transaction is finalized and that those employees will have “future employment opportunities with any possible buyer.”
McDonald’s has stated that it will write off a charge of up to $1.4 billion (or £1.1 billion) in order to offset the costs associated with withdrawing from its venture.