In 1990, McDonald’s became the first restaurant in the Soviet Union. The line stretched around the block as Russians waited to taste a Big Mac – one of McDonald’s oldest and finest creations.
The people of Russia were literally hungering for food at the time. “We’re all hungry in this city,” said a woman after being asked why she lined up outside the chain store. She added that there is nothing available at stores or restaurants.
The meal at McDonald’s had cost about half a day’s wage. But people lined up for it and said it’s unusual but ‘delicious.’ Mcdonald’s then ended their day serving over 30,000 customers – a big achievement for an American company inside the Soviet Union.
Now, the company will close its doors to customers in the country after 32 years, following the continued siege of Russia against Ukraine. The restaurant emptied out Russian stores due to the continued attacks on Russia’s neighboring affecting many Ukrainians and Russians alike.
When McDonald’s announced the temporary closure of 800 stores in March, people were quick to react and express sadness over this decision. After a series of sieges against Ukraine, the company decided to voluntarily exit from the country. One Russian man even handcuffed himself outside one such restaurant chain, shouting, “Closing down is an act of hostility against me and my fellow citizens!”
“To a generation of Russians, McDonald’s — commonly referred to as MakDak — was a fascinating phenomenon,” according to Bakhti Nishanov, a Eurasia specialist.
Nishanov said that McDonald’s holds a great symbolic representation in the history of Russia. He recounts that the company’s entry to Russia, at the time still part of the Soviet Union, meant that the country was already fit for running a business, and it was open for more investments. “The company leaving Russia is an explicit signal that the country is no longer a place you want to be in as a business,” he said.
The McDonald’s management said that the “humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.” It also announced the selling of its 847 restaurants to interested buyers.
According to the management, the “humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.” The management also announced that they would be selling their 847 stores across the country.
McDonald’s CEO, Chris Kempczinski, said that the decision was ‘extremely difficult’ on their part. He assured employees they would still be paid until a buyer assumes company assets in Russia.
McDonald’s exit does not come at a low price. The revenue losses from their departure will amount to about $1.2 to 1.4 billion dollars, which, if combined with other chains in Ukraine, makes up 9% of total company earnings.
“McDonald’s leaving Russia hits many of my generation differently,” Nishanov said, “I think because it represented — and I know this sounds dramatic — hope and optimism. The company leaving confirms Putin’s Russia is a place devoid of those two things,” he concluded.
Opinions expressed by US Insider contributors are their own.