The glowing golden arches of McDonald’s have been synonymous with Western ideals since the company’s beginning. Those same golden arches are now leaving Russia after three decades.
The idea to make McDonald’s a staple in Russia began in 1976 after the company loaned buses to organizers of the 1980 Moscow games. Organizers were visiting Canada, and the buses McDonald’s loaned allowed them to tour the area. They were taken to a McDonald’s restaurant as a part of the tour. Thus began the plan to get McDonald’s into Russia.
In 1990, McDonald’s opened its doors at its first Russian location in the heart of Moscow’s Pushkin Square. While the restaurant served simple burgers and fries, it symbolized a new Russian union with Western culture and was the first American restaurant to enter the Soviet Union.
The franchise served as a sort of magical portal for Russian citizens that allowed them to experience what they assumed life in the West was like, said political philosopher and author Vlad Vexler.
Vexler ate one of the 30,000 meals the Moscow restaurant served on its opening day. Reliving the opening day of McDonald’s, he summed it up to AP News as follows:
“The feeling was, ‘Let’s go and see how Westerners do things better. Let’s go and see what a healthy society has to offer.'”
The Chicago-based company leaving Russia strikes a chord with people like Vexler. He feels that McDonald’s departure signals a change, but not for the better.
“The symbolism of McDonald’s leaving, for me, is really about Russia turning into a direction that is a dead-end, a direction that won’t offer anything to Russia and won’t allow Russia to offer anything to the world,” he told AP News.
When Russia initially invaded Ukraine, McDonald’s temporarily closed its 847 Russian locations in March. However, as of Monday, McDonald’s CEO Chris Kempczinski announced that remaining in Russia goes against the company’s values, and its continued presence is no longer a viable option.
McDonald’s stated that it intends to sell its Russian portfolio to a local buyer. The buyer will not be able to utilize any of McDonald’s branding, symbols, menus, or name. TASS, a Russian state-owned news agency, reported this switch could happen as soon as next month.
According to the WSJ, the McDonald’s company owns 84% of Russian locations, while 16% are franchises. The exit is estimated to cost the company a loss of between $1.2 to $1.4 billion.
While the company stands to lose a significant amount of money, Wall Street analysts say the departure makes good business sense. The monthly maintenance cost of the restaurants, which includes paying employees, is $55 million.
Kempczinski stated that the decision to leave Russia was a tough but necessary one.
He noted that he had to ask five crucial questions: could the company proceed with operations in Russia legally, could the company meet the needs of customers and workers without hindrance, did its presence in Russia favorably represent the company, and was this presence a financially sound decision?
The answer to all of them was “no,” Kempczinski said, and added it seems likely to stay that way for the foreseeable future.
However, he did note that the famous arches may return to Russia one day, so it may not be a “Goodbye” but an “Until we meet again.”