McDonald's from Russia has indigestion

McDonald's has decided to leave Russia for good. The company's business in the country will be sold, representatives of the American network said.
17.05.2022
Kompania
Origin source
As a result of leaving the Russian Federation, the company expects to incur non-cash costs in the amount of approximately $1.2-1.4 billion. At the same time, in mid-June, the restaurant chain may resume work in the country under a new brand.

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The New York Times learned about the sale of the business to the owner in Russia. The publication writes that restaurants in the Russian Federation will no longer be able to use the name, logo or branding of McDonald's. McDonald's said in a statement that its "priorities include ensuring that McDonald's employees in Russia continue to be paid until the deal closes and also be able to work with any potential buyer in the future."

The process of selling the business has already been launched, according to the official release of the company. At the same time, it is noted that the network will retain its trademarks in Russia.

This decision McDonald's led to a special operation in Ukraine. The company indicated that further business ownership in the Russian Federation is no longer appropriate and does not correspond to its values. The network has been present on the Russian market for more than 30 years.

Chris Kempchinski, CEO of the company, noted that the company is proud of its Russian employees, local suppliers and franchisees. “Their dedication and loyalty to McDonald's makes today's announcement extremely challenging. However, we are committed to our global community and must remain steadfast in our values,” he said.

As a result of leaving Russia, the company expects to incur non-cash costs of approximately $1.2-1.4 billion from write-offs of net investment in the market, and also expects significant losses from foreign currency conversion.

The release indicated that McDonald's restaurants in Ukraine remain closed while the company continues to pay full wages to its employees in the country.

Under a new brand

At the same time, TASS learned that McDonald's will resume operations in Russia under a new brand in mid-June, retaining its staff, restaurant chain and menu.

Earlier, the media reported on McDonald's plans to resume work in the Russian Federation under a new brand. This possibility was mentioned by several sources in the food market. “The company intends to save the funds already invested in Russia, which went to the development of a restaurant chain. Therefore, it is logical that the company is now looking for a way how to do this, ”they told Izvestia. At the same time, the company itself did not confirm the information, calling it rumors and offering to wait for an official announcement.

McDonald's was the leader among companies that suspended operations in the Russian Federation in terms of the number of employed employees. According to Forbes, 62,000 people worked in 800 restaurants in Russia. The chain announced the suspension of work in the country from March 14, while some of the restaurants continued to operate on a franchise basis.

Commenting on the departure of the restaurant chain, State Duma Speaker Vyacheslav Volodin said that domestic chain companies should take the place of foreign chain companies, and if they do not do this, then the state will take this place.

“Well, well, close up, but only tomorrow there should already be not McDonald's, but Uncle Vanya's.” Jobs must be saved and prices reduced. This is the approach,” he said in early March.

On the same day, Moscow Mayor Sergei Sobyanin proposed to replace the 250 McDonald's outlets that had closed in the capital with Russian catering on the same day. He noted that 99% of food products in the network are supplied by Russian suppliers. “We talked with a number of enterprises that operate in this industry, and we see that within six months, a maximum of a year, this entire network can be safely replaced by our domestic enterprises,” Sobyanin said on March 10 at a meeting with heads of trade and service enterprises.

Rejection of "sandwich technology"

The departure of McDonald's in a conversation with the "Company" was commented by State Duma deputy from the Communist Party Nikolai Arefiev. He suggested not replacing the network with anything, pointing out that people in the country were suffering from "sandwich technology". Instead, Arefiev called for a return to "normal agricultural technologies, a normal balanced diet and a healthy lifestyle."

“Today the government is shouting: “Ah-ah! McDonald's is out! We have nothing to replace!” And I, on the contrary, would give them a kick so that they never come back. And if the government is not able to replace the network, then it must resign: I am ready to head the government and I know how to do it, ”the deputy expressed expressively.

He mentally suggested returning to the times of the USSR, when the country "had everything of its own", including pure domestic products, and the people had never suffered from obesity. “They have synthetic meat and poisoned products, the arrival of McDonald's did not give us anything good,” the official is sure.

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