McDonald’s said on Wednesday (9) that the temporary closure of its 847 stores in Russia will cost the fast-food chain about US$ 50 million (R$ 250.4 million) a month.
A wave of major US brands including Starbucks, PepsiCo and Coca-Cola have also announced their total or partial withdrawal from Russia following the country’s invasion of Ukraine.
McDonald’s, an icon of the post-Soviet era, manages 84% ​​of its locations in Russia and has said it will continue to pay all of its 62,000 administrative and restaurant employees.
Other costs will come from rents and the supply chain, the company’s chief financial officer Kevin Ozan said during a conference hosted by UBS on Wednesday.
“This is a really challenging and complex situation for a global company like us,” he said.
Another seven fast-food brands with more than 2,600 outlets combined in Russia could also take a financial hit from any decision to withdraw from the country, although nearly all of these restaurants are owned and operated by independent franchisees.
Pizzeria chain Papa John’s said in a statement on Wednesday that it may have to absorb the $15.2 million cost of receivables associated with its master franchisee in Russia, which manages all of its 188 restaurants. in the country.
Franchise royalties accounted for less than 1% of Papa Johns’ total revenue in 2021, the company said.
The pizzeria chain also announced the interruption of all operational, marketing and business support with the Russian market and stated that it is not receiving royalties from restaurants in the country. The group’s franchisee in Russia owns and operates its own supply chain.
Muscovites said goodbye this Wednesday (9) to brands such as McDonald’s and Starbucks, symbols of Russia’s openness to the West, which decided to suspend their activities due to the conflict in Ukraine.
Lena Sidorova, an 18-year-old dance student, liked to go to the iconic McDonald’s on Pushkin Square, the first American fast food restaurant that opened its doors in Russia in the late 1990s, in full perestroika effervescence.
“Not very often, but once a month so I don’t break my diet too often,” smiles Lena, before saying she was “saddened” to hear of the closure of her “bad food paradise.”
“I hope it is a temporary measure”, adds the young woman, for whom the sanctions “are not the fault of Russia, but of the West”.
McDonald’s, which has 850 restaurants in Russia, is a favorite place for two other Muscovites, Stepan Grountov and Stanislav Logvinov, two students at a transport university.
“It’s very sad, but what is the relationship between McDonald’s (and the conflict in Ukraine)?” asks Stepan, a 17-year-old Belarusian.
For him, the closing of this place where “everyone goes as a party” is “a tragedy”.
Donbass is worth more than one Mc Donald’s‘s
“But the real tragedy is what is currently happening in Ukraine, where two brother peoples are facing each other”, adds the young man.
The student dreams of the day when “the rockets stop raining on the cities” and “a compromise is found”.
“The lives that are saved in Donbass are much more important than eating well,” says 18-year-old Stanislav.
“Let them close if they want!” reacts Nikolai Kopylov, 42, who leaves the restaurant with a Big Mac in hand. “Donbass is worth a McDonald’s,” he adds.
The same is true of regular customers of another American chain, Starbucks, which also announced the temporary closure of its 130 Russian coffee shops.
Svetlana Issaieva, a 42-year-old manager, drinks her favorite coffee at a Starbucks next to the Kremlin before starting her sports class.
“I like their coffee, which always reminds me of my years working in the United States” twenty years ago, he says.
Next door, 23-year-old Aliona works on her computer. A refugee from Donbas, she went to work in Moscow 18 months ago and says she is “shocked” by the decision of major Western brands to close their doors in Russia.
“The West has always marked the difference between the government and the people”, he points out.
“But here they are punishing precisely those 20% of the population, that famous middle class traditionally considered pro-Western”, adds the young woman, who preferred not to give her surname.
(with AFP)
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