Detroit, March 9
McDonald’s, Starbucks, Coca-Cola, PepsiCo and General Electric – ubiquitous global brands and icons of American corporate – have all announced that they were temporarily suspending their business in Russia in response to the country’s invasion of Ukraine.
“Our values mean we cannot ignore the unnecessary human suffering in Ukraine,” McDonald’s President and CEO Chris Kempczynski said in an open letter to employees.
The Chicago-based burger giant said it would temporarily close 850 stores but would continue to pay its 62,000 employees in Russia who have “put their heart and soul into our McDonald’s brand”. Kempzinski said it is impossible to know when the company will be able to reopen its stores.
“The situation is exceptionally challenging for a global brand like ours, and there are many considerations,” Kempczinski wrote in the letter. For example, McDonald’s works with hundreds of Russian suppliers, and serves millions of customers each day.
Last Friday, Starbucks said it was donating profits from 130 of its Russian stores – owned and operated by Kuwait-based franchise Alashya Group – to humanitarian relief efforts in Ukraine. But on Tuesday, the company changed its stance and said it would temporarily close those stores.
The Alashaya Group will continue to pay Starbucks’ 2,000 Russian employees, Starbucks President and CEO Kevin Johnson said in an open letter to employees.
“Through this dynamic situation, we will continue to make decisions that are true to our mission and values and communicate with transparency,” Johnson wrote.
The Coca-Cola Company announced it was suspending its business in Russia, but offered few details. Coke’s partner, Switzerland-based Coca-Cola Hellenic Bottling Company, has 10 bottling plants in Russia, its largest market. Coke holds a 21 percent stake in the Coca-Cola Hellenic Bottling Company.
PepsiCo and General Electric both announced the partial closure of their Russian businesses.
General Electric also said in a Twitter post that it was partially suspending its operations in Russia. GE said the two exceptions would be essential medical equipment and support for existing power services in Russia.
McDonald’s is among those taking the biggest financial hit. Unlike Starbucks and other fast food companies like KFC and Pizza Hut, which have franchise-owned Russian locations, McDonald’s owns 84 percent of its Russian stores. McDonald’s has temporarily closed 108 of its restaurants in Ukraine and continues to pay those employees.
In a recent regulatory filing, McDonald’s said that its restaurants in Russia and Ukraine contribute 9 percent of its annual revenue, or about USD 2 billion last year.
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