April 25, 2024

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McDonald's temporarily closes all of its locations in Russia

McDonald’s temporarily closes all of its locations in Russia

After days of silence and apparent reluctance to take a stand while facing mounting pressure to respond to Russia’s invasion of Ukraine, several US food and beverage companies said Tuesday they were temporarily halting their operations in Russia.

McDonald’s, which has been in Russia for three decades, was the first to say it would temporarily close 850 restaurants in the country, including those it owns and those owned by franchisees.

Starbucks soon followed suit, saying that 130 restaurants in Russia are owned and operated by the Kuwaiti group Alshaya GroupIt will also close immediately. Coca-Cola followed suit.

And late in the day PepsiCo, whose Pepsi drink has been sold in Russia since the early 1970s, said it would. Soda sales suspended, including 7Up. But it said it would continue its operations in manufacturing milk, dairy products, infant formula and baby food, partly as a humanitarian effort but also to keep 20,000 factories and 40,000 farm workers employed.

McDonald’s opened its first restaurant in Russia in 1990, on Pushkin Square in Moscow, and has become a symbol of Western culture for the Russian people.

“For 66 years, we have worked with the belief that communities become better when there is a McDonald’s soon,” said Chris Kempczynski, the company’s CEO, in a statement. He noted that the company employed 62,000 people in the country, worked with hundreds of local Russian suppliers and partners, and served millions of Russian customers every day.

Investors, as well as social media users, have stepped up pressure on companies to withdraw from Russia, Especially fast food chainswhich has been criticized for lagging behind other companies in making decisions about its operations in Russia.

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Thomas B. said: “I commend the companies that are taking the right steps and halting their operations in Russia.”

McDonald’s said it will continue to pay salaries to McDonald’s employees in Russia, as it did to its employees in Ukraine. Starbucks said its licensing partner in Russia will provide “support” to nearly 2,000 employees in Russia.

McDonald’s will feel the financial impact of this move. Although Russian operations make up only 3 percent of its operating income, they make up 9 percent of its revenue.