Fast Food Chains Face Growing Pressure to Halt Operations in Russia

by Shelby Scott
fast-food-chains-face-growing-pressure-to-halt-operations-in-russia

Nine days have passed since Putin authorized his nation’s unprovoked invasion of Ukraine. In that time, countless well-known companies and brands have pulled out of Russia in an effort to cripple its economy. International sanctions span famous brands like Apple, oil companies such as Exxon Mobile, and American automakers like Ford and GM. Now though, as the sanctions continue, popular fast-food chains face growing pressure to halt their operations across Russia.

What We Know:

  • McDonald’s faces particular scrutiny from the public in the face of Russia’s ongoing invasion.
  • More American brands and companies pull out of Russia.
  • Consumers plan to boycott the fast food chain if locations remain operational across Russia.

Popular American Companies Urged to Cut Russian Ties

Currently, Russian forces and their infamous leader have their attention turned to Ukraine’s defenses. However, at home, the massive nation’s economy has entered what will likely become a crippling financial crisis. International sanctions are intended to punish Putin and sink Russia’s economy. However, world-renowned companies, like McDonald’s, PepsiCo, and Starbucks, remain under intense scrutiny as operations continue.

Yahoo! News reports popular brands and companies, including IKEA, Spotify, and Nike, are among the latest to sever ties with Russia. And with Visa and Mastercard blocking Russian banks from utilizing their networks, it’s only a matter of time before the nation’s financial institutions suffer.

As of Friday, New York state comptroller, Thomas DiNapoli, released a letter, urging companies to halt ongoing operations in Russia. Reportedly, they face “significant and growing legal, compliance, operational, human rights and personnel, and reputational risks.”

He additionally explained that the sanctions would not only “address various investment risks associated with the Russian market,” but also, “[condemn] Russia’s role in fundamentally undermining the international order.”

Despite DiNapoli’s reasoning, the targeted companies, namely McDonald’s and PepsiCo, did not respond to requests for comment. However, as the invasion ensues, consumers plan to boycott the company if action isn’t taken soon.

IKEA Issues Statement Regarding Recent Sanction

While we await answers from the aforementioned companies, IKEA became the first Western company to “sanction” both Russia and Belarus at the same time. Many major brands and companies have targeted Russia’s economy amid the ongoing conflict, but IKEA has seemingly noted Belarus as a major ally for the Eastern nation.

In speaking to the crisis, brand owner Inter IKEA and Ingka Group shared their sympathies with Ukraine.

“The devastating war in Ukraine is a human tragedy. We offer our deepest empathy and concerns to the millions of people impacted.”

The statement continued with, “The war has a huge human impact [on the world economy]. It is resulting in serious disruptions to supply chain and trading conditions, which is why the company groups have decided to temporarily pause IKEA operations in Russia.”

While the end goal of the sanctions is to discourage Putin’s advance into Ukraine, the effects most immediately reach the Russian public. That said, the world-renowned furniture store has promised to continue paying its 15,000 employees for at least the next three months.

Specifically, IKEA stated, “The company groups will secure employment and income stability and provide support to [Russian employees] and their families in the region.”

Outsider.com