Exiting the Russian market in response to the invasion of Ukraine helped McDonald’s to improve the operating margin of the company overall, said the company’s CFO Kevin Ozan on July 26, 2022.
Even though the Russian market was one of the company’s largest international markets, it had an operating margin below the global average of the fast food restaurant chain. The CFO said that the Russian part of the business had previously represented roughly 2% of system-wide sales, 7% of revenues, and 2% of operating income.
This proves that clinging to the supposedly large market as some companies still do by remaining in Russia, might be not as beneficial as some would think. In fact, leaving the country behind can be better for business from a financial point of view as well. This is especially important now when sanctions start to take a toll on the Russian economy. As the Russian Higher School of Economics states, by the end of the year, consumer spending might fall by 6.8% and economists believe this will be a long-term trend as unemployment will grow.