McDonald’s has begun the process of selling its Russian business, bringing down the curtain on 30 years of operating in the country.
The fast food chain closed its 850 restaurants in Russia back in March following the invasion of Ukraine, costing it almost $130m in the last quarter. The majority of that was from food and other items it had to dump, as well as staff costs and leases.
CEO Chris Kempczinski said it is now seeking a permanent withdrawal from Russia, where it owns close to 85% of its stores.
Restaurants in Russia and Ukraine contribute around 9% of McDonald’s turnover, so the move will cost it $2 billion a year in lost income.
As part of the exit, the company expects to record a non-cash charge of between $1.2 billion and $1.4 billion.
In a statement, the chain said: “The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable.”
McDonald’s launched its first restaurant in Russia back in 1990 as the Soviet Union was opening its economy to Western brands.
It is thought that the restaurants will be sold to a local buyer, although they will no longer be allowed to use the McDonald’s name, branding and menu. However, it will keep its trademarks in Russia.
McDonald’s 62,000 employees will continue to be paid until the sale has completed, with many likely to be offered future employment with the new owner.