McDonald’s Temporarily Closes All of Its Locations in Russia
After days of silence and seeming reluctance to take a stance while facing rising pressure to respond to Russia’s invasion of Ukraine, several iconic American food and beverage companies said on Tuesday that they were pausing operations in Russia.
McDonald’s, which has been in Russia for three decades, was first to say it would temporarily close its 850 restaurants in the country, including those it owns and those owned by franchisees.
Starbucks soon followed, saying the 130 restaurants it has in Russia, which are owned and operated by the Kuwaiti conglomerate Alshaya Group, would also immediately close. 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 suspend soda sales, including 7Up. But it said it would continue its operations that manufacture milk, dairy products and baby formula and food, partly as a humanitarian effort but also to keep its 20,000 manufacturing and 40,000 farm workers employed.
McDonald’s opened its first restaurant in Russia in 1990, in Pushkin Square in Moscow, and became a symbol of Western culture to the Russian people.
“For 66 years, we have operated with the belief that communities are made better when there’s a McDonald’s nearby,” Chris Kempczinski, the company’s chief executive, said 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 each day.
Investors, as well as social media users, have ramped up pressure on businesses to pull out of Russia, especially fast-food chains, which have been criticized for lagging behind other companies with decisions about their Russia operations.
“Companies doing business in Russia need to seriously consider whether it’s worth the risk,” Thomas P. DiNapoli, the head of the New York State pension fund, one of the world’s largest and most influential investors, said in a statement. “I commend the companies that are taking the right steps and suspending their operations in Russia.”
McDonald’s said it would continue to pay salaries for McDonald’s employees in Russia, as it has for its employees in Ukraine. Starbucks said its licensing partner in Russia would provide “support” to the nearly 2,000 employees in Russia.
McDonald’s will feel a financial impact from the move. Although the Russian operations make up only 3 percent of its operating income, they make up 9 percent of its revenue.