Starbucks is making a complete exit from Russia, joining the long list of others corporations leaving the country due to his invasion of Ukraine.
The licensed partner of the coffee shop chain has agreed to suspend operations at its 130 stores in Russia, and the company will now withdraw its brand completely from the market, Starbucks announced on Monday. It will provide labor assistance and pay its nearly 2,000 workers in Russia for six months, the company added.
“We condemn the unprovoked, unjust and horrific attacks in Ukraine by Russia, and our hearts go out to all those affected,” Kevin Johnson told employees in March before retiring as CEO. “The invasion and humanitarian impact of this war is devastating and creates a domino effect that is felt all over the world.
The Seattle-based company’s move echoes that of other large corporations that have suspended operations or withdrawn from Russia. McDonald’s sells its Russian business “That includes 850 restaurants that employ 62,000 people,” fast food chain Alexander Govor announced on Thursday.
The deal comes days after McDonald’s said it would leave Russia because of its own invasion of Ukraine in February. Govor is acquiring all of the company’s restaurants in Russia and will operate them under a different name. The terms of the deal, which is expected to close in a few weeks, were not disclosed.
Like Starbucks, the Chicago-based company announced in early March that it did temporarily closing its stores in Russia but would continue to pay employees. On Monday, he said he would look for a Russian buyer to hire these workers and pay them until the sale closes. He did not identify any potential buyers.
CEO Chris Kempczinski said the “dedication and loyalty to McDonald’s” of Russian employees and hundreds of suppliers made it a difficult decision to leave.
“However, we have a commitment to our global community and we need to stand firm in our values,” Kempczinski said in a statement. brilliant there “.
While trying to sell its restaurants, McDonald’s said it plans to start removing golden bows and other symbols and signs with the company name. He said he will keep his trademarks in Russia.
“This was the best of a series of difficult choices,” James O’Rourke, a professor of management at Mendoza College of Business at the University of Notre Dame, said in an email. “Under this agreement, McDonald’s Russian employees will have a stable job future, ordinary citizens will have a better-known neighborhood place to have a sandwich and a soda, and by” unloading “the 850 stores in Russia, McDonald’s Corporation It will protect the brand and recover at least part of its capital investment “.
Russia’s first McDonald’s opened in the middle of Moscow more than three decades ago, shortly after the fall of the Berlin Wall. It was a powerful symbol of the reduction of Cold War tensions between the United States and the Soviet Union.
McDonald’s was the first American fast food restaurant to open in the Soviet Union, which collapsed in 1991.
How effective have the sanctions been against Russia?
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McDonald’s decision to leave comes when other US food and beverage giants, such as Coca-Cola, Pepsi and Starbucks, have halted or shut down operations in Russia in the face of Western sanctions.
Corporations from the British energy giants Shell and BP to the French carmaker Renault have withdrawn from Russia, affecting their results as they seek to sell their stakes there. Other companies have stayed at least partially, with some facing setbacks.
On Monday, Renault handed over its Russian assets to the Kremlin, both sides announced, “marking the first major nationalization since the start of sanctions for Moscow’s military campaign in Ukraine,” Agence France-Presse said.
McDonald’s said it expects to charge $ 1.2 billion to $ 1.4 billion to leave Russia.
Its restaurants in Ukraine are closed, but the company said it continues to pay the full salaries of its employees there.
McDonald’s has more than 39,000 locations in more than 100 countries. Most are owned by franchisees: only 5% are owned and operated by the company.
McDonald’s said leaving Russia will not change its forecast to add 1,300 net restaurants this year, which will contribute about 1.5% to company-wide sales growth.
Last month, McDonald’s reported earnings of $ 1.1 billion in the first quarter, down from more than $ 1.5 billion the previous year. Revenue was nearly $ 5.7 billion.
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