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February 28, 2022updated 22 Jul 2022 12:05pm

Ukraine conflict threatens closure of US fast-food chains in Russia

Together KFC and McDonald's have nearly 1,900 locations across Russia.

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict

US-based fast-food restaurant chains, including KFC, McDonald’s, Papa John’s, Pizza Hut, Burger King and Starbucks, are reportedly at risk amid ongoing tensions between Russia and Ukraine.

Yahoo Finance reported that these food chains are now unclear as to whether Russia will move to close their restaurants in retaliation to the sanctions imposed by the West for its invasion of Ukraine.

Over the past two decades, these US-based restaurant chains have expanded their presence significantly in the Russian market.

Papa John’s CEO Rob Lynch was quoted by Yahoo Finance as saying: “I guess my only rationale is that there is some concern that these actions today [invasion] will have an impact on our company and what I can tell you is that we don’t see it that way.

“One of the great things about being in the food business as is that through good times and bad usually the business is pretty stable. We are very, we are globally diverse company. We operate in 50 countries.”

McDonald’s, Papa John’s, KFC, Pizza Hut, Burger King and Starbucks together operate nearly 2,700 restaurants in Russia, according to the report.

Of these, KFC and McDonald’s account for the majority, with nearly 1,900 locations across the country, while Burger King has more than 550 sites in Russia.

In its annual report, Yum! Brands, the owner of KFC, Pizza Hut, Taco Bell and The Habit Burger Grill, said: “Escalating tensions between Russia and Ukraine and any potential military incursion of Russia into Ukraine could adversely impact macroeconomic conditions, give rise to regional instability and result in heightened economic sanctions from the US and the international community in a manner that adversely affects us and our concepts’ restaurants located in Russia and Eastern Europe, including to the extent that any such sanctions restrict our ability in this region to conduct business with certain suppliers or vendors, and/or to utilise the banking system and repatriate cash.”

Last October, Burger King announced plans to install the Qlik Sense software across point-of-sale databases at all its restaurants in Russia.

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