McDonald's sells all stores in Russia and withdraws, 'It is no longer incompatible with McDonald's values'

by Bruno Girin

McDonald's, which had been closed in Russia in March following the invasion of Ukraine that began on February 24, 2022, has announced that it will sell its business in Russia. The company says it will continue to pay Russian employees until it finds a buyer, and the cost of withdrawal is estimated to be up to $ 1.4 billion.

McDonald's Exits Russia Over War in Ukraine, to Take Write-Off of $ 1.4 Billion --Bloomberg
https://www.bloomberg.com/news/articles/2022-05-16/mcdonald-s-to-leave-russia-take-write-off-of-up-to-1-4-billion

What McDonald's closures in Russia could mean for the country
https://www.cnbc.com/2022/04/28/what-mcdonalds-closures-in-russia-could-mean-for-the-country.html

The news that McDonald opened its first Russian store on Moscow's Pushkin Square in 1990, just before the collapse of the Soviet Union, became a hot topic as a symbol of reconciliation between Russia and Western countries, giving the store a 'capitalist taste'. As many as 30,000 Russians gathered in search of it on the first day of opening. Even in recent years, McDonald's was so popular in Russia that there were millionaires who chartered helicopters just to eat , but in addition to being forced to close the store due to the invasion of Ukraine, a Russian domestic hamburger whose logo is very similar to McDonald's as a rear pot Even the chain store ' Uncle Wagna ' has appeared.

McDonald's suspends operations in Russia and plans to continue paying salaries to 62,000 employees-GIGAZINE

Meanwhile, McDonald's CEO Chris Kempczinski said in a document for employees on May 16 that 'the humanitarian crisis in Ukraine and the unpredictable business environment that accompanies it, sales in Russia are no longer possible. It is possible and inconsistent with McDonald's values, 'he said, revealing that he has begun the process of selling the Russian business.

McDonald's plans to 'de-arch' the store by selling all stores to local buyers, while retaining the trademark in Russia, and eliminating all store names, M-shaped McDonald's logos, brands, menus, etc. At the time of writing the article, the specific seller is unknown.

McDonald's has also temporarily closed 108 stores in Ukraine for safety reasons. Combined Russian and Ukrainian stores, McDonald's sales are 2% of the world total and operating profit is less than 3%. However, McDonald's financial results for the first quarter of 2022 were $ 27 million in leasing fees, purchasing costs, employee wages, etc. due to closures in both countries, and $ 100 million (about 129) due to unsold inventory. It is estimated that the cost of this withdrawal will be 1.2 billion dollars (about 155 billion yen) to 1.4 billion dollars (about 180 billion yen).

McDonald's will continue to pay employees in both countries until a buyer for the Russian business is found and the business in Ukraine can be resumed.