McDonald's has announced that it's temporarily closing roughly 850 restaurants in Russia amid the ongoing conflict with Ukraine. The chain employs roughly 62,000 in the country, and will continue paying salaries during the shutdown.
About 84 percent of McDonald's stores in Russia are company-owned, as well as all 108 units in Ukraine. The two countries contribute 9 percent of annual revenue, or approximately USD$2 billion.
“We understand the impact this will have on our Russian colleagues and partners, which is why we are prepared to support all three legs of the stool in Ukraine and Russia,” CEO Chris Kempczinski said in a statement.
Prior to the move, McDonald's donated $5 million to assist Ukrainian team members and has provided medical care and humanitarian aid through Ronald McDonald House Charities. The chain has also supported relief efforts led by the International Red Cross.
“As we move forward, McDonald’s will continue to assess the situation and determine if any additional measures are required,” Kempczinski said.
“At this juncture, it’s impossible to predict when we might be able to reopen our restaurants in Russia. We are experiencing disruptions to our supply chain along with other operational impacts. We will also closely monitor the humanitarian situation.”
Yum! Brands, parent of Pizza Hut, KFC, Taco Bell is temporarily shuttering operations in Russia, as well. The company oversees roughly 1,000 KFC stores and 50 Pizza Hut units in the country, mostly under license or franchise agreements with independent owners.
The brand will redirect all profits from Russia operations to humanitarian efforts, and will donate $1 million to the Red Cross. Yum! is also activating its disaster relief fund to support Ukrainian franchise employees and is matching donations from employees to UNICEF, Red Cross, World Food Programme, and International Rescue Committee.
“Like so many across the world, we are shocked and saddened by the tragic events unfolding in Ukraine,” the company said in a statement.
“Yum! Brands has suspended all investment and restaurant development in Russia while we continue to assess additional options.”
Starbucks, which has about 130 stores in Russia owned and operated by a licensed partner, has not shuttered operations. However, the brand said it will donate royalties to humanitarian relief in Ukraine and that the Starbucks Foundation has contributed $500,000 to World Central Kitchen and the Red Cross.
A number of major corporations have discontinued operations in Russia after the invasion of Ukraine, such as Ford, General Motors, Apple, Facebook, Twitter, Netflix, BP and Shell. Before Tuesday's announcement, McDonald's was under pressure to join the growing list, with #boycottMcDonald's circulating Twitter.
Kempczinski said in more than 30 years of operating in Russia, McDonald's has become an essential part of the community. But he also noted, "our values mean we cannot ignore the needless human suffering unfolding in Ukraine."
