Russian President Vladimir Putin has threatened to nationalize U.S. businesses that close their operations in his country. But even if the mastermind of the Ukraine invasion doesn’t go that far, McDonald’s will still pay a steep price in absolute dollars for doing the right thing and closing its Russian stores, as this week’s episode of "Working Lunch" reports.
"Working Lunch" hosts Joe Kefauver and Franklin Coley note that the Russian market generates 9% of McDonald’s global systemwide sales—a staggering figure for any business. Because the burger giant has opted to continue paying the shuttered units’ employees and landlords, it will still be spending about $50 million a month, with no offsetting revenues.
But as the government affairs veterans behind Align Public Strategies point out, there’s the question of what the burger giant could lose in terms of reputation and the good faith of customers elsewhere if it didn’t act. As they stress, doing the right political thing can be costly in terms of absolute dollars, but staying aloof from a highly politicized situation can be even more of a financial and moral wallop.
“I’m proud of McDonald’s and our industry for doing the right thing,” says Kefauver.
The duo also look at how tipping could be affected by the surge in cashless restaurant transactions, and what the unionization of more Starbucks units last week signals for the chain and the rest of the industry.
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