Temporary restaurant closures in Russia and Ukraine have cost McDonald’s millions of dollars.
The fast-food giant is facing a loss of $100 million worth of spoiled inventory as over 950 stores remain closed while Russian President Vladimir Putin’s war in Ukraine drags on, McDonald’s CEO Chris Kempczinski said Thursday.
McDonald’s has already lost $27 million on payments for leases, employee wages, and supplier costs between the two countries after suspending operations in March, Kempczinski said during a financial call, according to CNN.
Employees working in the two countries have continued to be paid during the conflict. The company has also worked with the International Red Cross in the region on relief efforts and donated $5 million toward its Employee Assistance Fund.
MCDONALD’S WILL TEMPORARILY CLOSE MORE THAN 800 LOCATIONS IN RUSSIA
“The situation is extraordinarily challenging for a global brand like ours, and there are many considerations. For 66 years, we have operated with the belief that communities are made better when there’s a McDonald’s nearby,” Kempczinski wrote in a memo to staff in March.
The company has 62,000 employees in Russia across 847 restaurants and operates 108 storefronts in Ukraine, which have all been closed indefinitely.
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In the first quarter of this year, the company reported a net income of $ 1.1 billion, down from $1.54 billion the previous year, CNBC reported.
