McDonald’s Closes Over 800 Restaurants in Russia

Posted on

In a temporary move and response to the invasion of Ukraine by Putin’s forces, fast food giant McDonald’s has closed 850 of its restaurants in Russia.

Almost two weeks after Russian forces invaded Ukraine, the company has finally broken its silence over the war.

McDonald’s, citing “the needless human suffering unfolding in Ukraine,” announced yesterday that it will temporarily close 850 locations in Russia.

CEO Chris Kempczinski wrote in a letter to franchisees and employees that the chain will pause all operations in Russia but will continue to pay its 62,000 Russian employees, and its Ronald McDonald House Charities will continue to operate.

It was also this week that PepsiCo, Starbucks and Coco-Cola announced similar step-backs from the country.

McDonald’s had been receiving criticism for staying silent on the war, given its relatively large Russian footprint. McDonald’s restaurants in Russia and Ukraine account for 2% of its systemwide sales, roughly 9% of its revenue and 3% of its operating income.

“In the thirty-plus years that McDonald’s has operated in Russia, we’ve become an essential part of the 850 communities in which we operate,” Kempczinski wrote in his letter. “At the same time, our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”

About 84% of McDonald’s Russian locations are owned by the company, while the rest are operated by franchisees.

According to Kempczinski, it is impossible to predict when McDonald’s would be able to open its Russian restaurants. The company is experiencing supply chain disruptions and other operational challenges.

Yum Brands has also said it would suspend restaurant development and investment in Russia. The KFC owner has more than 1,000 restaurants in Russia that account for roughly 2% of its systemwide sales.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.