McDonald’s said Monday that it will sell its business in Russia after more than 30 years in the country.
The company cited the war in Ukraine and the unpredictable operating environment in Russia as its reasons for leaving, saying in a news release that its “continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.”
“We’re exceptionally proud of the 62,000 employees who work in our restaurants, along with the hundreds of Russian suppliers who support our business, and our local franchisees. Their dedication and loyalty to McDonald’s make today’s announcement extremely difficult,” Chris Kempczinski, McDonald’s president and chief executive officer, said in the press release. “However, we have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there.”
In March, McDonald’s closed all its restaurants in Russia including its site in Pushkin Square in the capital, which was the first in the country.
As part of the exit, the company expects to record a non-cash charge of about $1.2bn (£980m) to $1.4bn.
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 more than 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.
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 noncash 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.
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