McDonald’s Re-Openings In Ukraine And Closures In Russia Are Commercial Marketing Barometers For The War. Current Forecast, Subject To Change: High Pressure In Kyiv. Low Pressure In Moscow.
McDonald’s Closures Re-Openings In Ukraine And Closures In Russian Federation Are Commercial Marketing Barometers For The War.
Current Forecast, Subject To Change: High Pressure In Kyiv. Low Pressure In Moscow.
But, Good Optics Not Always 100% Positive.
Wait No More For Camembert Cheese Bites… Influenced By France, Only In Ukraine.
Traditionally, Chicago, Illinois-based McDonald’s Corporation (2022 revenue US$23.1 billion) seeks to be the last United States-based brand remaining in a country prior to others departing.
The restaurants with their Golden Arches logo are symbols of United States global corporate reach and United States global consumer influence.
The company has approximately 38,000 locations in more than one hundred countries (including Ukraine and Russian Federation). For perspective, there are 193 member states of the New York, New York-based United Nations (UN).
Commercially, the closure of a McDonald’s is not dissimilar from lowering the Stars & Stripes at a United States Embassy. Not, however, turning the flag upside-down which signals dire distress.
Seattle, Washington-based Starbucks Corporation (202 revenues US$32.9 billion) through its eponymous Starbucks is becoming near-equally synonymous with McDonald’s through its 36,000 coffee-focused locations in eighty countries (although not, yet, Ukraine). Pre-24 February 2022, Starbucks had 130 locations in the Russian Federation operated by its licensee Kuwait City, Kuwait-based Alshaya Group.
McDonald’s is a commercial barometer (or bellwether). Low pressure one result. High pressure a different result. Consequently, a barometer tracks changes to be predictive as to what is likely during a series of moments. Corporations and to some extent governments emulate what McDonald’s does, how it does it, and when it does it.
“A barometer measures air pressure: A “rising” barometer indicates increasing air pressure; a “falling” barometer indicates decreasing air pressure. A high reading on a barometer often indicates high pressure, which meteorologists interpret as good weather. A low reading on the barometer is often a precursor to bad weather patterns.”
McDonald’s has 109 locations in twenty-seven cities in Ukraine. The first Ukraine location opened in Kyiv on 24 May 1997. The pre-24 February 2022 population of Ukraine was approximately forty-four million.
For comparison, pre-24 February 2022 there were approximately 850 McDonald’s in the Russian Federation (population approximately 144 million). The first McDonald’s in the Russian Federation opened on 31 January 1990 in the capital Moscow.
Within weeks of 24 February 2022, McDonald’s Corporation began to close its locations throughout Ukraine and Russian Federation.
On 24 February 2022, the armed forces of the Russian Federation invaded and further invaded the territory of Ukraine in what Vladimir Putin, President of the Russian Federation (2000-2008 and 2012- ), defined as a Special Military Operation [SMO] then on 22 December 2022 he redefined as a war. The initial invasion by the armed forces of the Russian Federation was in part from the territory of the Republic of Belarus.
The war between the Russian Federation and Ukraine did not commence on 24 February 2022. The roots began their trajectories on 20 February 2014 when the armed forces of the Russian Federation invaded the Crimean Peninsula and the area known as the Donbas Region (Donetsk Oblast and Luhansk Oblast).
The operations in the Russian Federation would be sold to a Russian Federation-based corporation who would change the name and the menu. With astonishing swiftness, the transition was completed within weeks, beginning with the first McDonald’s in the Russian Federation in Pushkin Square in Moscow.
McDonald’s (through Kyiv, Ukraine-based McDonalds Ukraine Ltd.) has re-opened some of its restaurants in Ukraine beginning with those areas considered safe for employees and customers; and with interruptions to provisioning unlikely, temporary, and surmountable.
First to again sell a Happy Meal and Big Mac were in the largest city and capital, Kyiv (in the north), and sixth-largest city, Lviv (in the west). Locations in Kharkiv and Odesa have yet to again welcome customers.
As of 2 March 2023, the company reported sixty-seven locations operational in Ukraine of which forty-three were located in Kyiv.
As with any return-to-normal process for a country at war, there are positives and negatives. The positive is a return demonstrates that the government of the country is capable of defending at least the locations and supply chains required to sustain McDonald’s.
This is important for the population- a Big Mac symbolizes a victory of sorts, albeit a high-calorie one. If McDonald’s is confident it can provide its products, care for its employees, and offer customers the same experience that exists in other markets, that confidence migrates to other companies.
There negatives too.
If McDonald’s re-opens in a country at war the message is that the environment is becoming safer- returning towards what existed the day prior to the war, in this instance 24 February 2022.
When, however, the government believes it must continue to present outside of the country- to governments, organizations, and individuals that a war continues without an expiration date and the government continues to require commercial, economic, humanitarian, military, and political assistance, there is conflicting message…. And a result is some companies calculate better to wait out uncertainty than to prematurely reenter the marketplace. In this instance, a marketplace of what will again hopefully be forty-four million.
Which is why the reopening of McDonald’s is significant. The message from the company to the government of Ukraine and to the citizens of Ukraine is the company has conducted a risk analysis and its conclusion was the Golden Arches could return to Ukraine. More importantly, had to return to Ukraine.
Save room for the Camembert cheese bites… Influenced by France, only available in Ukraine!
Statement From McDonald’s Corporation About Ukraine Operations
“Since then [24 February 2022], our employees, franchisees, and suppliers have mobilized to provide financial and humanitarian assistance to our Motherland and Ukrainians who also need help. Together, we established an employee benefit fund to support our people and financially supported the initiatives of the Ronald McDonald House Foundation, which helped children and families by providing medical supplies to hospitals and other places where help was needed. The company continued to pay the salaries of more than 10,000 employees, and countless members of the McDonald’s Family around the world opened their hearts, homes, and restaurants to those seeking asylum.
While the challenges were indescribable, the experience also bore witness to what Chris Kempczynski said at the McDonald’s World Convention earlier this year: It’s in the darkest times that the Golden Arches shine brightest. Our entire system’s commitment to feeding and growing communities – whether around the corner or on the other side of the world – is something we can all be proud of.
Supporting our people in Ukraine continues to be our number one priority. We have had many conversations with our employees, who have expressed a great desire to return to work and see our restaurants in Ukraine reopen where it can be done safely and responsibly. In recent months, the belief that this will add a small but important sense of normalcy has strengthened. And Ukrainian officials noted that the enterprises that resume work would support the local economy and the Ukrainian people.
After extensive consultations and discussions with Ukrainian officials, suppliers, and security experts, and in light of requests from our employees to return to work, we have decided to implement a phased plan to reopen some restaurants in Kyiv and western Ukraine where other businesses have safely reopened. Over the next several months, our partners and we will be working to restore restaurant supply chains, prepare restaurants to serve customers, return restaurant teams and employees to the work environment, and implement enhanced procedures and protocols to keep our people and customers safe.
As we prepare to serve our Ukrainian customers again, we will be guided by our values and our purpose to feed and grow communities.”