Golden Arches Go Dark in Moscow

Hungry, stressed-out Russians may deserve a break today, but they won’t be getting one at McDonald’s. Today the company announced that it is closing all 850 restaurants in Russia, at least temporarily, in response to the country’s invasion of Ukraine, a highly symbolic move for the U.S. chain that was among the first to enter the former Soviet Union three decades ago.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.” in an open letter to employees, though, the president and CEO of McDonald’s, Chris Kempckinski, said closing those stores for now is the right thing to do. Mr. Kempczinski said it’s impossible to know when they will be able to reopen.“The situation is extraordinarily challenging for a global brand like ours, and there are many considerations,” Mr. Kempczinski wrote in the letter. McDonald’s works with hundreds of Russian suppliers and serves millions of customers each day.When McDonald’s opened its first store in Russian in 1990, on Moscow’s Pushkin Square, it generated worldwide buzz and was hailed as a sign of a rapidly thawing Cold War. Thousands of Russians lined up before dawn to try hamburgers, many for the first time. This reporter remembers ordering a Big Mac and Milk Cocktail (milkshake) at the spotless counter there in 1993 and thinking that the global village might not be such a bad thing after all. The closures mean no Big Macs for Muscovites, who are doubtless blaming the impending deprivation on their country-gobbling president, the hungry Russ himself, Vladimir Putin, but they may also spell big losses for McDonald’s. In a recent regulatory filing, the Chicago-based company said its restaurants in Russia and Ukraine —where the company has also shuttered its restaurants — contribute nine percent of its annual revenue, or around $2 billion last year.Unlike other big fast food brands in Russia that are owned by franchisees — including KFC, Pizza Hut, Starbucks, and Burger King — McDonald’s owns 84 percent of its Russian locations.Many corporations have ceased operations in Russia in protest of the Ukraine invasion. Among them is consumer goods conglomerate Unilever, which on Tuesday said it has suspended all imports and exports of its products into and out of Russia, and that it will not invest any further capital into the country.Pressure has been mounting on those that remain, and hashtags to boycott companies like Coca-Cola and PepsiCo quickly emerged on social media. Microsoft, Apple, and American Express are some of the corporations that have in recent days announced suspension of their sales and business operations in Russia due to the ongoing conflict in Ukraine.Last week, New York State’s comptroller, Thomas DiNapoli — a trustee of the state’s pension fund, which is a McDonald’s investor — sent a letter to McDonald’s and nine other companies urging them to consider pausing their operations in Russia. In a statement Tuesday, Mr. DiNapoli commended McDonald’s for its action.A Los Angeles Times article just days before the opening of the Pushkin Square branch, in January 1990, noted that staff were being trained to be “polite, friendly and say things like, ‘Have a good day’ and, ‘Come back soon,’ phrases rarer than black pearls back in the days of Russia’s Soviet interlude.

Golden Arches Go Dark in Moscow

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