McDonald’s, other US fast food brands bracing for anti-American backlash in Russia

A McDonald's retailer in a St. Petersburg purchasing middle.
Peter Kovalev/TASS

McDonald’s, KFC and different large US quick meals manufacturers are possible bracing themselves for a politically pushed backlash in Russia, restaurant trade watchers mentioned.

Prior to now when tensions have flared over Ukraine, Russia has closed sure McDonald’s retailers within the nation, claiming “sanitary violations.” The nation’s officers may act in such a method once more if anti-American sentiment deepens over the warfare in Ukraine.

Final week, McDonald’s investor relations disclosed that it owns the overwhelming majority of the 847 McDonald’s shops in Russia and that it owns all the 108 eateries in Ukraine. That’s a change from its mannequin within the US and far of the remainder of the world, the place franchisees personal the retailers — and it exposes the company to better threat.

Mixed, these eating places symbolize 9% — or $2.1 billion — of the corporate’s worldwide revenues.

“I by no means would have anticipated that these two markets alone generated about 9% of McDonald’s worldwide revenues out of some 120 international locations,” restaurant analyst Mark Kalinowski advised The Publish.

There are 847 McDonald’s eating places in Russia, together with this eatery in Moscow.

Vladimir Gerdo/TASS

McDonald’s doesn’t sometimes disclose detailed details about its holdings in particular person international locations, Kalinowski added.

Different chains have an analogous variety of eateries in Russia.

In August, KFC mentioned it had simply opened its 1,000th restaurant in Russia, the place it sometimes opens 100 eateries a 12 months, the corporate mentioned. 

Papa John’s operates about 185 eating places in Russia, the corporate mentioned on an earnings name final week whereas Burger King has about 550 eateries within the nation.

KFC operates about 1,000 eating places in Russia.

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The final time tensions between the US and Russia flared over Ukraine, Russia ordered the momentary closure of 4 McDonald’s eating places in Moscow over alleged sanitary violations. 

On the time, a outstanding Russian politician – Vladimir Zhirinovsky – known as for McDonald’s to be shut down throughout nation after the restaurant firm withdrew from Crimea after Russia took over the area from Ukraine.

Later that 12 months, a shopper watchdog in Russia sued McDonald’s claiming that the corporate was deceiving shoppers concerning the dietary worth of its meals.

KFC says it opens about 100 eating places in Russia a 12 months.

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McDonald’s didn't instantly reply for remark concerning the present state of affairs.

However its supplemental data additionally identified that its enterprise in Russia and Ukraine accounts for lower than 3% of its working earnings, or revenue.

A lot of the restaurant corporations have sought to tamp down hypothesis about their publicity to the battle with Papa John’s chief government, Robert Lynch, including on the earnings name that “usually this actually gained’t have a huge impact on our working state of affairs or commensurately financials.”

Quick meals restaurant corporations are downplaying their threat on account of warfare between Russia and Ukraine.

Kirill Kukhmar/TASS

The Ukrainian McDonalds are at present closed “for security causes,” the corporate’s operation there mentioned on Fb on Sunday, nevertheless it additionally mentioned “native authorities” had been taking its merchandise and “distributing them the place they're wanted most.”

In accordance with a Kyiv Impartial report, each KFC and McDonald’s are donating meals by way of their shops within the Ukraine to residents and the army.