McDonalds to Exit Russia

Issue 123

McDonalds said it would quit Russia and sell its regional business there, ending more than three decades in the country over its invasion of Ukraine.

In deciding to sell, the fast-food giant joins a raft of Western companies, from automakers to brewers, in exiting Russia having initially opted to pause its operations in the country.

McDonald’s had in March said it would temporarily close its 847 restaurants in Russia while continuing to pay the 62,000 people it employs there. Since then, pressure has mounted on Western companies—particularly from the Ukrainian government—to pull the plug on their Russian operations. Moscow has also pressured companies, threatening legislation to nationalize assets and compel executives to resist Western sanctions.

The departure of McDonald’s from Russia is particularly notable given its arrival was emblematic of a rush among Western companies in the 1990s to enter the country, seeking to profit from its move from communism to capitalism. McDonald’s opened its first Russian location in Moscow’s Pushkin Square in 1990, when thousands of locals lined up to get their first taste of the American chain’s burgers and fries.

Source: Wall Street Journal