McDonald's to temporarily close restaurants in Russia

Reuters

Posted at Mar 09 2022 04:30 AM | Updated as of Mar 09 2022 04:43 AM

McDonald's Corp. said on Tuesday it would temporarily close its restaurants in Russia, becoming the latest Western company to pause all operations in the country following its invasion of Ukraine.

The fast-food chain said it would continue to pay salaries to its 62,000 employees in Russia.

Major global brands, including McDonald's and PepsiCo Inc PEP.O, have been pressured to pause their operations in Russia by several bodies, including New York state's pension fund.

KFC parent firm halts investment in Russia

Meanwhile, Yum Brands Inc., parent company of fried chicken chain KFC, is pausing investment in Russia, a key market that helped the brand achieve record development last year, the company said.

However, Yum did not comment on whether it would seek to limit or pause current restaurant operations in Russia after the country's invasion of Ukraine.

Yum, which has at least 1,000 KFC locations and 50 Pizza Hut locations in Russia that are nearly all independent franchisees, said in a post on its website dated Monday that it had "suspended all investment and restaurant development in Russia while we continue to assess additional options."

The restaurants are owned and operated independently through franchise agreements, meaning Yum does not have as much control as if it ran them itself but also has less exposure to financial and operational risks.

Last year was a record year of development for KFC, led by new restaurants opening in China, India and Russia, executives said during an earnings call on February 9.

Overall, KFC international opened more than 2,400 gross units in 2021. In Russia, the company was opening about 100 new restaurants annually and had expected to continue a "a similar expansion strategy going forward."

(Reporting by Uday Sampath in Bengaluru; Editing by Shailesh Kuber and Sriraj Kalluvila)

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