McDonald’s to exit the Russian market after 30 years

McDonald’s has announced it will leave the Russian market and has already started the process of selling its restaurants in the country.

It comes after the global foodservice retailer temporarily shut all restaurants in Russia and paused all operations in the region in March 2022.

The fast-food chain said that the humanitarian crisis following Russia’s invasion of Ukraine led it to conclude that "continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.”

The company is aiming to sell its entire portfolio of McDonald’s restaurants in Russia to a local buyer after more than 30 years' operating in the region.

These sites will be prohibited from using McDonald’s menu, branding, logo or name, even though the company will keep its trademarks in Russia.

As part of the exit, McDonald’s said it expected to write off roughly $1.2-1.4b from its net investment in the market. Its operating margins are due to settle on the 40% range as a result of cutting business ties with Russia.

The company assured Russian employees that they will be paid until the close of any transaction and that they will receive work from any potential buyer.

Chris Kempczinski, president and chief executive of McDonald’s, said: “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.

“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.”

McDonald’s restaurants remain closed in Ukraine, but the retailer continues to pay full salaries for its workforce in the country.

The chain has also launched the McDonald’s System, which provides Ukrainian refugees with food donations, employment and housing.

McDonald’s operates in over 100 countries across 39,000 locations.

In March Ukrainian tourism associations wrote to the chief executives of seven top international hotel groups urging them to withdraw from Russia.

Hotel groups including Hyatt, Accor and Radisson have announced they will suspend future investments, development activity and hotel openings in the region.

Foodservice giant Compass Group and Jamie Oliver Group have both withdrawn their operations in Russia in response to the conflict.

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