'Until we meet again,' McDonald’s tells Russia as it exits the country for good
McDonald’s is a lot more than just burgers for a lot of people. Wherever it went, from Seattle in the US to New Delhi in India, it became a part of the lives and culture of the people there. We still remember the first time we ever visited a McDonald’s outlet; the birthdays that were celebrated there, the first dates, and much more.
The story of McDonald’s and Russia is a special one and the one which is coming to an end.
McDONALD’S TO EXIT RUSSIA
McDonald’s has announced that it is leaving Russia for good – no, not just temporary suspension of operations – after over 30 years, due to the Ukraine war.
The President and Chief Executive of the restaurant chain, Chris Kempczinski, sent a letter to the employees on Monday, May 16, 2022, communicating the company’s decision to leave Russia for good.
“Some might argue that providing access to food and continuing to employ tens of thousands of ordinary citizens, is surely the right thing to do. But it is impossible to ignore the humanitarian crisis caused by the war in Ukraine,” Kempczinski said in the letter.
You might recollect the long queues at McDonald’s franchises in Russia in March 2022, when the company had announced it will be temporarily suspending operations. People wanted to get their last McDonald's meals till the restaurants reopened.
Kempczinski said that when McDonald’s decided to temporarily suspend operations in March, they were hoping for “peace to soon return to the region”. However, the decision now signals that businesses are wary of the situation getting back to normal any time soon, or they have assessed that the consequences are beyond normal and temporary now.
THE WORLD’S NORTHERNMOST McDONALD’S
With McDonald’s decision to pull out of Russia, the location of the northernmost McDonald’s has once again changed. Murmansk, the biggest city in the Arctic Circle in Russia, was home to the world’s northernmost McDonald’s.
Come next chilly winter, revellers will not be able to enjoy their hot meals at the one-of-a-kind McDonald’s anymore in Murmansk. Instead, the McDonald’s outlet in Rovaniemi, Finland, will become the new northernmost McDonald’s in the world after the one in Murmansk closes.
THE STORY OF McDONALD’S IN RUSSIA
McDonald’s, like everywhere else, also embedded itself into the lives of Russians. But its arrival in Russia and its expansion since is a tale of the history books.
- It took 14 years after McDonald’s became a thing in the West, for it to enter Russia.
- The idea to bring the American fast-food chain to Russia began at the 1976 Olympics in Canada, when members of the Russian Olympic Team used McDonald’s Big Mac Bus to get around the Olympic Village.
- In 1990, it came to Russia (then USSR) when the Berlin Wall fell. It signalled a thaw in Cold War.
- A year later in 1991, USSR fell.
- It took over 3 decades for McDonald’s to become the Russian way of life.
- And it took just one war, 30 years later, to upend it all.
WHAT NEXT FOR McDONALD’S?
- McDonald’s has 850 restaurants in Russia. And unlike in other places where the American fast-food giant relies on franchises, in Russia, McDonald’s owns 84% of the restaurants.
- Since 1990, McDonald’s developed a workforce of over 60,000 people.
- Currently, McDonald’s is in the process of selling its infrastructure to a local buyer.
- BBC News reported that the restaurant chain will also ensure payment to its current employees in Russia until the sale is over. It will also ensure that the employees have "future employment with any potential buyer".
- However, McDonald’s will retain its ‘goldern arches’ trademark in Russia. Though, already several Russian companies have filed for trademark logos that look similar to that of McDonald’s.
- For McDonald’s, it is the first pull out from a major market in its history.
- McDonald's will bear a loss of $1.4 billion for the exit.
Several major Western businesses have temporarily suspended operations. However, McDonald’s and French carmaker Renault have become the two companies to shut businesses permanently in Russia. However, an exit for businesses is not an easy decision to make. Chain restaurants like Burger King are not in a great position to negotiate an exit like McDonald’s due to complicated franchise contracts.
Will McDonald’s ever return to Russia again? McDonald’s did not say that it will never return to Russia again. Chris Kempczinski has a very heartfelt farewell message: …let us not end by saying, “goodbye.” Instead, let us say as they do in Russian: До новой встречи. “Until we meet again.”