In wars, everyone loses, in addition to the unfortunate human casualties, the damage to Ukraine’s infrastructure and the economic punishments imposed on the Russian economy, the companies that decided to leave are also facing their decision with monetary losses.
Like McDonald’s, which after deciding to temporarily leave Russia as a disapproval measure for its invasion of Ukraine has lost millions of dollars.
CNN reported that Chris Kempczinski, the CEO of the company of the golden arches, spoke about the losses that the company has had in the quarter due to the war conflict.
Kempczinski said in a call with analysts that restaurant closures in Russia and Ukraine have so far cost the company about $127 million dollars last quarter.
McDonald’s said in March that it would continue to pay its 50,27 Russian employees, despite r to close its operations in the country, but the fast food company is also supporting Ukrainian employees: “In both countries, we have continued to pay employees and provide additional support.”
Kempczinski detailed that payments to personnel, plus expenses for leases and supplies, cost the company $27 million and that the other $ 100 millions were food and other items that you will have to get rid of.
“The results included… $100 million dollars in inventory costs in the company’s supply chain that are likely to will be eliminated due to the temporary closure of the restaurants”, explained the company.
The conflict has been going on since February and there are no signs of progress in the negotiations, and given the uncertainty the company said it will offer an update on its plans for the region at the end of the second quarter.
Inf McDonald’s statement notes that the chain had 847 restaurants in Russia at the end of last year, along with others 108 in Ukraine, which accounted for 9% of the company’s revenue in 2021.
Closures affected McDonald’s net income falling by 28% in the three months ending March 31.
In The report for investors indicates that in the United States, the chain’s sales soared 3.5%, thanks in part to higher prices. In the first quarter, McDonald’s prices rose 8%.
“Consumers are definitely concerned about inflation,” Kevin Ozan said during the call. “They are worried about energy and gas prices.” He added: “we are keeping a close eye on low-end consumers just to make sure we are still providing the right value.”
2021
Last year, McDonald’s raised prices by 6%.
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