Starbucks withdraws entirely from Russia and joins a growing list of guitars.Because of the invasion of Ukraine.
The coffee shop chain’s licensing partners have stopped operating 130 stores in Russia and the company has now agreed to withdraw the brand entirely from the market. presentation On Monday. The company added that it would provide job assistance and pay salaries to nearly 2,000 employees in Russia for six months.
“We condemn Russia’s unjust, unjust and horrific attack on Ukraine, and our hearts go out to all those affected,” Kevin Johnson told employees before retiring as CEO in March. “The aggression and humanitarian impact of this war is devastating and creates a ripple effect that is felt worldwide.
The Seattle-based company’s move reflects the moves of other large companies that have either shut down operations or withdrawn from Russia. presentation thursday.— Includes 850 restaurants employing 62,000 people — Existing licensee of fast food chain Alexander Govor
The deal came days after McDonald’s announced it was pulling out of Russia.in February. Govor will take over all of the company’s restaurants in Russia and run them under a different name. Terms of the transaction, which are expected to close in a few weeks, were not disclosed.
Like Starbucks, the Chicago-based company opened in early March.However, we will continue to pay our employees. On Monday, it said Russian buyers would hire the workers and pay them until the sale is over. Could not identify potential buyers.
CEO Chris Kempczinski said leaving the company was a difficult decision because of the “commitment and loyalty to McDonald’s” of its employees and hundreds of Russian suppliers.
“However, we have a commitment to the global community and we must hold fast to our values,” Kempczinski said in a statement. “Our commitment to our values means that we can no longer make the Arch shine.”
McDonald’s said it plans to start removing the golden arch with the company name and other signs and signs when it tries to sell the restaurant. He said he would keep the trademark in Russia.
“It was the best of a series of difficult choices,” James O’Rourke, professor of business administration at the University of Notre Dame’s Mendoza School of Business, said in an email. “Under this agreement, McDonald’s Russian employees will have a secure employment future, ordinary citizens will have their most familiar neighborhood place for sandwiches and soft drinks, and will protect the brand by ‘taking back’ 850 stores of McDonald’s Corporation in Russia. It will pay back at least a portion of the capital investment.”
Russia’s first McDonald’s opened in the heart of Moscow over 30 years ago, shortly after the fall of the Berlin Wall. It was a powerful symbol of easing Cold War tensions between the United States and the Soviet Union.
McDonald’s was the first American fast food restaurant to open in the collapsed Soviet Union in 1991.
McDonald’s decision to withdraw comes as other U.S. food and beverage giants, including Coca-Cola, Pepsi, and Starbucks, have temporarily suspended or closed their operations in Russia in the face of Western sanctions.
Companies ranging from British energy giant Shell and BP to French automaker Renault have withdrawn from Russia and have been hit hard as they attempt to sell their holdings in Russia. Others stayed at least partially, and some faced headwinds.
Agence France-Presse announced on Monday that Renault had transferred Russian assets to the Kremlin, saying “it marked the first major nationalization since the inception of sanctions against Ukrainian military operations in Moscow”.
McDonald’s said it expects to record costs on imports of between $1.2 billion and $1.4 billion as it leaves Russia.
A restaurant in Ukraine has been closed, but the company says it continues to pay its employees full salaries.
McDonald’s has more than 39,000 stores in more than 100 countries. Most of them are owned by merchants. Only about 5% of companies are owned and operated by companies.
McDonald’s said its withdrawal from Russia would not change its estimate of adding 1,300 net restaurants this year.
Last month, McDonald’s reported first-quarter revenue of $1.1 billion, down from $1.5 billion a year earlier. Revenue was nearly $5.7 billion.