Hospitality Business Magazine

McDonald’s closes 850 outlets in Russia

McDonald’s has announced it is temporarily closing all of its 850 restaurants in Russia in response to the country’s invasion of Ukraine.

The burger giant said it will continue paying its 62,000 employees in Russia “who have poured their heart and soul into our McDonald’s brand”. But in an open letter to employees, McDonald’s president and CEO Chris Kempckinski said closing those stores is the right thing to do for now.

“Our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”

Kempczinski said it’s impossible to know when the company will be able to reopen its stores.

McDonald’s has also temporarily closed 100 restaurants in Ukraine and continues to pay those employees.

The company could take a big financial hit because of the closures. In a recent regulatory filing, the Chicago-based company said its restaurants in Russia and Ukraine contributed 9 per cent of its annual revenue, or around $2 billion.

Unlike other big fast-food brands in Russia that are owned by franchisees – including KFC, Pizza Hut, and Burger King – McDonald’s owns 84 per cent of its Russian locations.

Pressure has been mounting for McDonald’s and other companies like Coca-Cola and PepsiCo that remain in Russia to pull out. Many corporations have ceased operations in the country in protest of the Ukraine invasion.