McDonald’s is one of the many global companies closing their business in Russia because of Russia's aggression against Ukraine. Alina Didkovskaya, who has been covering the company as a business journalist and as the author of a Telegram channel dedicated exclusively to McDonald’s, explains why this is a symptom of a chasm between Russia and the rest of the world and how the chain's departure will affect the Russian culture and way of life.
I was a girl of 10 when McDonald’s opened in my hometown. At the beginning of the 2000s, we had shashlyk [shish kebab] joints right there on the streets, complete with plastic chairs for seating; we had restaurants with live music, pool tables, thugs, and cops; we also had a chain of Soviet-era confectionery stores called the “Golden Ear”. That was about it.
My whole world changed with the opening of McDonald’s in the very city center. For me, McDonald’s came to personify the reality that I so desperately longed for, like something from a film in which children didn’t have to recycle their parents’ beer bottles to get a few pennies, where you weren't scared of the police, where you couldn’t come across a corpse on your way to school (shoutout to the western district of the city Rostov-on-Don).
I know that almost everyone in Russia can count their first experience eating at McDonald’s amongst their favorite anecdotes. I have heard hundreds of stories featuring the iconic eatery: stories about going to McDonald’s with your parents on your birthday; or about going there with a foreign visitor to Russia; or about how you just couldn’t for the life of you figure out how to brew tea there; about how you went there on a date; or about how your parents carried cold cheeseburgers and french fries back home to Vladivostok from business trips to Moscow.
But my favorite story is the following: a friend of mine was traveling in Africa and fell severely ill from food poisoning. Half-delirious from his fever, he remembers being transported somewhere by boat over a journey that seemed endless. But just when he thought his life was over, he saw the Golden Arches of McDonald’s at a distance and realized that everything would be okay. McDonald’s represented a return to civilization from the wilderness.
This feeling of “civilization” that we all intuitively felt when we went to McDonald’s for the very first time was well described by the American journalist Thomas Friedman: “In the 1950–1960s developing countries thought that having an aluminum factory and a UN seat was what made them real countries, but today many countries think they will have arrived only if they have their own McDonald’s and Windows 95 in their own language.” It was also Friedman who first presented McDonald’s as a symbol of international cooperation, writing: “No two countries that both have a McDonald’s have ever fought a war against each other.”
James Cantalupo, the company’s head in the 1990s, said that ‘‘countries want McDonald’s as a symbol of something—an economic maturity and [a sign] that they are open to foreign investments.’’
McDonald’s opened in Russia at one of the most challenging moments in the country’s history—the collapse of the Soviet Union, of which it would become a symbol. On 30 January 1990, the eatery opened its doors to an extraordinary 30,000 people lined up at Pushkin Square in Moscow—one of the most important squares in Russia.
These were 30 thousand people who had come to taste American food. “When I came here [today], my eyes just popped out of my head. Everything is so beautiful, and I don’t even know what to choose, where to sit, what to order. In a nutshell, I’m pleased,” one of McDonald’s first visitors would say.
Later we would joke that if you couldn’t find a job related to your field of study after university, you could just go and work at McDonald’s. But back then in the early 1990s Moscow’s best foreign language students were recruited to work there, and, for some, McDonald’s would become a long-term career path, as they rose from their days at the cash register to the company’s top management.
McDonald’s would survive the August 1991 attempted Soviet coup d’état, the 1993 Russian constitutional crisis, the 1998 Russian financial crisis, the financial crisis of 2008, and the 2014 food embargo—a would-be catastrophe for any chain. But it chose to suspend operations in March 2022.
The decision to close McDonald’s in Russia was not an easy one. Since its appearance on the Russian market 32 years ago, the company has opened 850 restaurants in the country and employed 62 thousand people. The chain served 1.2 million people each day and worked with over a hundred local suppliers across the country. I’m talking about Russia here, not the United States.
“We cannot ignore the needless human suffering in Ukraine,” said McDonald’s CEO Chris Kempczinski in a statement that mentioned Ukraine 10 times over its 14 paragraphs. Only at the very end did he admit that the company was already facing supply chain problems in Russia in light of the country’s war against Ukraine.
In addition to having tens of thousands of employees in Russia—the number of locals who work for McDonald’s is comparable to the population of a city like Gorno-Altaisk—the company has more than 160 suppliers in Russia. Russian suppliers such as Miratorg are fortunate to have other local partnerships, whether with restaurants or supermarket chains, but other suppliers work exclusively with McDonald’s. In the city of Lipetsk, Russia’s “Belaya Dacha” and Lamb Weston Meijer even have a joint venture to produce french fries and one of their main customers is McDonald’s.
“Do you want to report that the supply of vegetables to Russia is a complete s***show? Nothing is being imported from Turkey, there is no iceberg lettuce, ‘Belaya Dacha’ and other local companies are only offering to [sell us] white cabbage. If [imports of] vegetables are not resumed [over] the next couple of days, Russia will become the first country in the world where a Big Mac is filled with cabbage instead of lettuce,” confided to me a representative of another large fast-food chain just a few days before McDonald’s announcement.
Today, the entire world is frozen, like a computer screen, on February 24th. Everyone is waiting to see what will happen next. And McDonald’s has frozen its Russian operation along with us. While the company has not yet left and there are rumors that its employees will continue earning their salaries for the coming three months, “at this juncture, it’s impossible to predict when we might be able to reopen our restaurants in Russia,” noted Kempczinski in his letter. What happens next is, therefore, an enigma.
Will this decision tangibly affect the company’s global operations? According to Bloomberg, McDonald’s locations in Russia and Ukraine account for only 2% of its locations worldwide and contribute to 9% of sales and 3% of operating income. Suspending its operations in Russia will cost McDonald’s $50 million dollars a month, writes Reuters. For comparison: the company’s annual revenue (including revenue generated from franchisees) amounts to $112 billion and its net profit (excluding franchisees) amounts to $7 billion.
McDonald’s departure from Russia will hit individual employees the hardest—a worker at the Lipetsk plant or a student hoping to earn a bit of extra money. But while the rest of us will definitely survive without a cheeseburger, we will lose this symbol of the collapse of the Soviet Union, a symbol of civilization that came upon us suddenly … once upon a time.
The opinion expressed in this publication is that of the author and does not necessarily reflect Holod’s opinion.