McDonalds wasted $100m of fast food and inventory after Russia exit

In its first-quarter earnings report, McDonald's revealed it lost $100 million in unused inventory upon closing its stores in Russia and Ukraine.

Following Russia's invasion of Ukraine, McDonald's joined other Western companies and closed all locations in Russia due to the conflict's "unspeakable suffering to innocent people".

Although McDonald's in Russia and Ukraine only made up roughly 9 per cent of the company's global sales, the closures do have financial implications.

In its earnings report on Thursday, the fast-food company said it lost $127 million in revenue just from exiting Russia, of which $27 million was allocated to paying employee wages, leases, and supplier payments.

Despite closing stores, McDonald's said it would continue paying employees in both countries, 62,000 of which are Russian.

The other $100 million was dedicated to inventory costs in the supply chain which "likely will be disposed of due to restaurants being temporarily closed".

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It is unclear what exactly the disposed inventory consists of, however, food likely makes up part of that.

The company did not specify how much food was disposed of, but people on social media are expressing their discontent with the potential food waste.

850 stores in Russia have been temporarily closed and 108 in Ukraine due to safety concerns. Despite losing revenue in Ukraine and Russia, the company experienced an increase in global sales by 11.8 per cent.

The exit from Russia comes nearly 30 years after the first McDonald's was opened in Russia in 1990. Notably, the opening attracted a lot of attention from people eager to experience their first taste of the Western fast-food giant.

We reached out to McDonald's for comment.

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