McDonald’s Russia Profits Plunge

Won't give the number but calls the sales "very weak"

Wed, Dec 10, 2014
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Almost half of population do not want McDonald's in Russia
Almost half of population do not want McDonald's in Russia © ITAR-TASS/Dmitriy Rogulin

MOSCOW, December 8 (TASS) - McDonald’s said Monday its same-store sales in Russia were “very weak” last month, as a number of the fast-food chain’s outlets were closed this past summer after unscheduled checks by Russia's food safety watchdog.

The fast-food operator reported declining November sales across all regions the fast-food chain serves. Sales in Europe fell 2% last month with a strong performance in the United Kingdom more than offset by “very weak” results in Russia and a slump in France and Germany, McDonald’s said.

Russia's food safety watchdog launched a wave of checks of nearly 200 McDonald's branches across the country in August. Several outlets were shut down in locations extending from Moscow to the Ural Mountains and from St. Petersburg to the south's Stavropol region.

These included the famous location on Pushkin Square that brought McDonald's to Russia just before the fall of the Soviet Union, a branch on Manezh Square under the Kremlin walls, and on the thoroughfare Prospect Mira.

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Many have reopened since. But inspections are still proceeding and some restaurants remain closed after court decisions, the company says.

Russian authorities said earlier they were not planning to close down McDonald's chain nationwide. “No one is talking about it at all (a ban on McDonald's in Russia),” Deputy Prime Minister Arkady Dvorkovich said after inspectors took to the road.

But some businessmen in Russia said checks had been driven by souring relations between Russia and the West over events in Ukraine.

“Obviously it's driven by political issues surrounding Ukraine,” said Alexis Rodzianko, president and CEO of the American Chamber of Commerce in Russia.

Outlets closed as Russia introduced a year-long embargo on meat, fish, dairy, fruit and vegetables from the United States, the European Union, Canada, Australia and Norway in retaliation for economic sanctions imposed by those nations on Russia.

McDonald's operates 435 restaurants in 85 Russian cities and rates the country one of its top seven major markets outside the United States and Canada, according to its 2013 annual report. The company employs nearly 37,000 people in Russia, serving more than a million customers a day.

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