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American fast food chain McDonald's will be pulling out of Russia for real.

Exiting Russia market

McDonald's chief executive officer Chris Kempczinski announced the Golden Arches' departure from Russia on May 16.

The exit comes slightly more than two months after the fast food chain announced that it will be temporarily shuttering all 850 of its outlets in Russia.

Kempczinski cited the unfolding Russia-Ukraine war as the reason for the temporary closure on Mar. 8 and said: "Our values mean we cannot ignore the needless human suffering unfolding in Ukraine."

He echoed the same sentiments in the May 16 announcement and said it is now "impossible" to ignore the humanitarian crisis caused by the war in Ukraine.

According to Kempczinski, this is the reason why "McDonald’s has made the decision to completely exit the Russian market".

Five reasons

The chief executive added that the consideration to staying or leaving Russia was "complicated", but boiled down to "five fundamental questions".

They are:

• Is McDonald's legally allowed to operate in Russia?
• Does McDonald's have the freedom to operate the business and meet the needs of their customers and crew unimpeded?
• Is McDonald's presence in the market brand-enhancing to their global operations?
• And does it make good business sense for McDonald's?
• Does remaining in Russia align with McDonald's values?

Kempczinski said the answers to the first four questions were no, and he does not see this changing for the "foreseeable future".

He addressed the fifth question and said pulling out of Russia is the right thing to do as "it is impossible to imagine the Golden Arches representing the same hope and promise that led us to enter the Russian market 32 years ago".

As a result, he said: "The Golden Arches will shine no more in Russia."

Looking to sell to Russian buyer

The fast food chain said on May 16 it has initiated a process to sell its Russian business.

According to AFP, Russia accounts for 9 per cent of the fast food chain's revenue and 3 per cent of its operating profit.

It is looking to sell off its entire portfolio of restaurants in Russia to a local buyer for between US$1.2 billion to US$1.4 billion.

The press release was issued in Chicago.

The one-time charge is expected to be in United States dollars, as the chain said it "recognise significant foreign currency translation losses".

After the sale, the restaurants remaining will no longer be able to use the McDonald's name, logo, branding or menu.

However, the fast food chain will retain its trademark in Russia.

End of an era

The exit of McDonald's from Russia, or "de-Arching", is the first such occurrence in the fast food chain's history.

This will effectively put an end to its 32-year run in Russia, since the first outlet McDonald's was launched in Pushkin Square, Moscow in January 1990.

According to Kempczinski, the first-ever outlet was 14 years in the making, after discussions to bring McDonald’s to Russia kicked off at the 1976 Olympics in Canada.

He said the opening was one of the "proudest and most exciting milestones" in the history of McDonald’s and the "beginning of a new era".

However, the chief executive expressed that he remains hopeful.

He said: "Thus, let us not end by saying, 'goodbye.' Instead, let us say as they do in Russian: До новой встречи. 'Until we meet again.'"

Russia-Ukraine war

It has been nearly three months since Russia invaded Ukraine on Feb. 24, 2022.

According to the United Nations (UN) report on May 16, the Office of the UN High Commissioner for Human Rights (ONHCR) recorded 7,564 civilian casualties in Ukraine.

Out of this number, 3,668 were killed, while 3,896 were injured.

However, OHCHR said it believes that the actual figures are "considerably higher" as information is delayed in areas with "intense hostilities" and reports are "still pending corroboration".

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