McDonald's Makes Major Decision About Its Restaurants in Russia
McDonald's will temporarily close its restaurants in Russia amid the country's invasion of Ukraine. The fast food restaurant chain announced Tuesday that it will shut down its 850 restaurants in Russia and "pause all operations in the market." The move makes McDonald's the latest company to pause all operations in the country amid the ongoing invasion.
In an email from CEO Chris Kempczinski to McDonald's employees and franchisees, the company explained it came to the decision after "working closely in consultation with our Chairman, Rick Hernandez, and the rest of McDonald's Board of Directors." The company said they moving forward, they "will continue to assess the situation and determine if any additional measures are required," adding that it is currently "impossible to predict" when McDonald's restaurants across Russia will reopen. Kempczinski noted that "RMHC Russia will continue its full operations" amid the restaurant closure.
"The conflict in Ukraine and the humanitarian crisis in Europe has caused unspeakable suffering to innocent people. As a System, we join the world in condemning aggression and violence and praying for peace. Our number one priority from the start of this crisis has been – and will remain – our people," Kempczinski wrote, later adding, "Our values mean we cannot ignore the needless human suffering unfolding in Ukraine. Years ago, when confronted with his own difficult decision, Fred Turner explained his approach quite simply: "Do the right thing." That philosophy is enshrined as one of our five guiding values, and there are countless examples over the years of McDonald's Corporation living up to Fred's simple ideal. Today, is also one of those days."
The temporary closure will impact some 62,000 employees who work at the chain's stores in the country. McDonald's said it will continue to pay salaries to those employees throughout the shutdown. According to CNBC, the company estimates that the closures will cost about $50 million per month. McDonald's CFO Kevin Ozan said at the UBS Global Consumer and Retail Conference on Wednesday, "we expect this to be temporary and we certainly don't take this decision lightly, but for us this is about doing what we think is the right thing to do, both for the global business and for our people locally." Ozan confirmed that in addition to paying employees' salaries, the company will also be paying leases for its locations, as well as supply chain costs and other expenses.
McDonald's is just the latest U.S. restaurant chain to suspend operations in Russia amid Russian President Vladimir Putin's invasion of Ukraine, which has created a humanitarian crisis and has resulted in more than two million people fleeing the country. Starbucks, Yum Brands, and Papa John's have also paused operations.