McDonald’s To Temporarily Shut Down Locations In Russia
McDonalds Corp. Restaurant Under Russia's New In-Dining Restriction A McCafe branded hot beverage inside a McDonalds Corp. restaurant in Moscow, Russia, on Wednesday, June 30, 2021. This week Moscow introduced new rules to require proof of vaccination, recovery from Covid-19 or a recent negative PCR test in order to dine indoors. Photographer: Andrey Rudakov/Bloomberg via Getty Images Bloomberg / Contributor
Photographer: Andrey Rudakov/Bloomberg/Contributor via Getty Images

On Tuesday, McDonald’s announced it would be temporarily shutting down 850 of its locations in Russia, pointing to “the needless human suffering unfolding in Ukraine.”

In a letter to McDonald’s employees and franchisees, CEO Chris Kempczinski confirmed, “McDonald’s has decided to temporarily close all our restaurants in Russia and pause all operations in the market.”

He added, “the Company has provided immediate financial support to our team in Ukraine. We are continuing to pay full salaries for our Ukrainian employees and have donated $5 million to our Employee Assistance Fund, and continue to support relief efforts led by the International Red Cross in the region.”

He also noted that salaries will continue to be paid to all McDonald’s employees in Russia. The Ronald McDonald House Charities (RMHC) in Russia will also carry on its full operations, “just as RMHC Ukraine is partnering with local hospitals and providing humanitarian aid throughout the country.”

McDonald’s recently received criticism because it hadn’t spoken out against the war and maintains a relatively large presence in Russia. 

According to CNBC, “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.” Around 84% of McDonald’s restaurants in Russia are owned by McDonald’s, while the remainder are operated by franchisees. McDonald’s also opened its first location in the Soviet Union before its collapse. 

Consumers are eyeing other major chains as some make decisions to close down locations in Russia.

Yum Brands announced it would be suspending its development of restaurants and investment in the country. “The KFC owner has more than 1,000 restaurants in Russia that account for roughly 2% of its systemwide sales,” CNBC noted. 

Starbucks also reportedly has around 130 locations throughout Russia and Ukraine. 

On Tuesday, Starbucks CEO Kevin Johnson wrote that the company continues “to watch the tragic events unfold and, today, we have decided to suspend all business activity in Russia, including shipment of all Starbucks products.”

“Our licensed partner has agreed to immediately pause store operations and will provide support to the nearly 2,000 partners in Russia who depend on Starbucks for their livelihood,” he added. “Through this dynamic situation, we will continue to make decisions that are true to our mission and values and communicate with transparency. Thank you for the care and concern you are sharing with me and your leaders.”

The moves come as countries continue to ramp up economic pressure on Russia in an effort to push back against Russian President Vladimir Putin’s invasion of Ukraine. 

On Tuesday, President Joe Biden announced a ban on the U.S. importing Russian oil and natural gas, stating that he is “targeting the main artery of Russia’s economy.”

“Russian oil will no longer be accepted at U.S. ports,” the president said during remarks at the White House. “We will not be part of subsidizing Putin’s war.” 

“The president said his decision comes after consulting with European allies, although he said some are not able to join the U.S. in banning Russian oil. Still, the European Commission (E.U.) said it plans to reduce imports of Russian energy by two-thirds, even though it gets 40% of it from Russia. For its part, the United Kingdom is to phase out Russian oil imports by the end of 2022,” The Daily Wire reported, adding, “Biden had been under heavy pressure to cut off imports of energy from Russian, the world’s third-largest producer of oil and second-largest producer of natural gas.”

U.K. Prime Minister Boris Johnson also said the U.K. is going to take action to end the importing of Russian oil. 

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