February 3, 2023

McDonald’s left with millions of dollars of Russian food it can’t use

2 min read

New York
CNN Business

McDonald’s Get out of Russia It costs a lot of money – and food.

The company announced last month that it would temporarily close its restaurants in Russia. Country invasion of Ukraine. It also closed restaurants in Ukraine. The shutdown cost McDonald’s کا 127 million in the last quarter.

McDonald’s said in March that it would continue to pay its 62,000 Russian employees despite shuttering operations in the country. CEO Chris Kempczinski added during a call with analysts Thursday that McDonald’s is also supporting Ukrainian employees: “In both countries, we have continued to pay employees and provide additional support.”

The cost of these staff, as well as the payment of leases and supplies, cost the company $ 27 million.

The remaining 100 100 million came from food and other items that needed to be disposed of.

The company said in a statement that “the results include ات 100 million in inventory costs for the company’s supply chain, which may be offset by the possible closure of restaurants.”

Kempczinski said the company would provide an update on its plans for the region by the end of the second quarter.

McDonald's said it would likely have to dispose of unused inventory in Russia.

At the end of last year, there were 847 McDonald’s restaurants in Russia, according to an investor document. With 108 more in Ukraine, they accounted for 9% of the company’s revenue in 2021.

The shutdown affected McDonald’s net income, which fell 28 percent in the three months ended March 31.

Elsewhere, sales of McDonald’s increased.

Globally, restaurant sales, which opened in at least 13 months, grew 11.8% this quarter, due to international locations. In the United States, sales rose 3.5 percent, partly due to higher prices.

In the first quarter, McDonald’s prices rose about 8%.

“Consumers are definitely worried about inflation,” CFO Kevin Ozan said during the call. “They are concerned about energy and gas prices.” But, he noted, the fact is Grocery is also becoming more expensive. “Maybe there’s been some benefit.” “We are keeping a close eye on … lower-level customers to make sure we are still delivering the right price,” he added.

Last year, McDonald’s raised prices by about 6%.

Marketing of the company’s core menu items and growth in its digital business, thanks in part. Rewards ProgramMcDonald’s said it also played a key role in boosting US sales.

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