The fast food company says it will likely have to dispose of unused stocks in Russia.
McDonald’s departure from Russia last month, due to a boycott of several calls still in the country after the Ukrainian invasion, caused the fast food company to lose revenue and profits. But not only that: he also forced him to keep food and other purchased Russian goods that he could not use. of which EUR 95 million.
The data was provided by the company itself in a quarterly earnings report quoted by CNN International that “McDonald’s leaving Russia costs a lot of money – and food.”
McDonald’s closures took place in both Russia and Ukraine, costing the company approximately € 120 million in the fourth quarter. Some of these costs relate to the salaries of the company’s employees in Russia, about 62,000, and the leasing of facilities that the company continued to support – not least because McDonald’s assumed the closure of the country would be temporary. The company has not yet provided more detailed information about its future plans in the area.
But most of the costs are indeed related to supplies, especially food: in the first quarter, the costs were € 95 million spent on food and other goods that have to be given up.
Kevin Ozan, the company ‘s own CFO, said in a conference call with analysts that the company’ s first – quarter results included € 95 million in “inventory costs in the company ‘s supply chain, which are likely to be left out due to the temporary closure of restaurants,” the company said in a statement.
According to CNN International, at the end of last year, there were 847 McDonald’s restaurants in Russia and 108 in Ukraine, which together accounted for about 9% of the company’s revenue in 2021.
The closure of these restaurants affected the company’s earnings, which fell 28% in the first quarter of this year.