Entreprise

The end of the Russian era when sanctions are taken and Western companies take off

The Iron Curtain, which separated Eastern and Western Europe for decades, had just collapsed. Fast food chains, now loved by Americans and many others, have been able to offer Big Macs to Russian customers.

Of course, Russians can choose to eat elsewhere or buy other goods. Since the collapse of the Soviet Union, many homemade chains have emerged in vast countries.

“Cola, Pepsi and McDonald’s were symbols of Russia’s westernization, Russia’s opening to the world, and the fact that these companies are leaving is to the extent that Russia is closed and inward. It is shown and emphasized, “says Gulnaz Sharafutdinova. Professor of Russian Politics at the Russian Institute in King’s College London.

Known to Russians as Pushkinskaya Square, the first McDonald’s on Pushkin Square served 700 people and was the largest store in the world for many years. Young middle-class Russians who grew up in the 1990s saw McDonald’s as a cool and attractive foreign restaurant somewhere. A place to take friends to celebrate a special birthday.

As the 21st century progressed, chains did not seem to be a very strong symbol of American culture, but they continued to be a popular place for Russian college students to gather for affordable lunches and dates, and others. It provided people with fast and cheap meal options. Opportunity for tens of thousands of Russians.

McDonald’s CEO Chris Kempczinski sent a message to staff on Tuesday announcing the company’s shutdown. CNN asked McDonald’s to confirm the restaurant’s last closing date, but hasn’t responded yet.

“It’s hard to say for now, whether it’s the end of the era, many observers are afraid it might be, and it’s difficult, dark and toxic to Russia. It depends on how long it takes to pass the authoritarians-significantly reducing the era of totalitarian dictatorship, “Sharaft Dinova said on the phone.

On August 21, 1991, a soldier handed two cans of Coca-Cola to a tank driver near the Russian Federation Building in Moscow.

Reputation scratches

Many ordinary Russians are still upset by the shock of the events of the last two weeks. Due to the tight control of war news coverage by the country, it is difficult to know exactly how much Western sanctions have changed their world.

But as the ruble’s value collapses and banks become more disciplined, financial distress is already felt. Some wealthy Russians have sold their assets abroad and even scrambled to leave the country while still possible, while non-wealthy people have less choice.
Shoppers pass the closed H & M store on March 4, 2022 at a Las Vegas shopping mall in the Russian capital.

Despite promises of continued support from employers, the most direct impact is clearly on those who work for Western companies that have ceased operations.

“Hundreds of local Russian suppliers” said Kempchinsky said in a statement that “we poured our heart and soul into the McDonald’s brand to serve the community” and that our 62,000 Russian staff will continue to be rewarded. And the impact on our partners. People who cook our menu dishes and support our brand. “

Swedish furniture giant IKEA, which first opened its doors to Russia in 2000 and now has 17 stores nationwide, has suspended all imports and exports inside and outside Russia and Belarus, all in Russia. He said he had decided to suspend the IKEA business. It has a direct impact on 15,000 workers.

“The corporate group’s ambitions are long-term, ensuring immediate employment and income stability and supporting local corporate groups and their families,” IKEA said in a statement.

Shoppers will wait in line to pay for the purchase at the IKEA store in Moscow on March 3, 2022.

Tomas Chamorro-Premuzic, a professor of business psychology at the University College London, said the impact is not direct to other Russians, but is likely to be depressing at two levels. Also, and perhaps more painfully, they will feel the scars of their reputation as “exiled and blamed by the world,” he said in an email.

Of course, Sharafutdinova points out that reactions in different sections of Russian society vary. Some of the companies that have stopped doing business in Russia are luxury brands where the majority of Russians couldn’t get their products.

But other people like IKEA, Starbucks, and even McDonald’s were regularly “visited, used, and consumed by the Russian middle class” in urban areas, she said. There are shifts, but it is another symbol of the middle class for the Russians, and they will lose their access, “she said.

Outside of these urban areas, where views are more international, Sharafutdinova added that the reaction is likely to be one of the rebellions faced with sanctions, and the West is seen as opposed to Russia.

Those Russians would think of themselves as a kind of Russian patriot who cares about Russia’s national interests, because that is the way the government presents it … they are in a rebellious mode. He settled behind the leadership and said, “OK, build the economy.”

Russian President Vladimir Putin argued on Friday that Western sanctions represent Russia’s $ 1.5 trillion economic opportunity, the 11th largest in the world.

“In recent years, if Westerners have imposed restrictions on us, we have shown that we have acquired new abilities and restored old abilities at new technical levels,” Putin said in Moscow, Belarusian leader Alexander Lukashenko. I talked to Lukashenko.

“This is an opportunity to move towards strengthening technical and economic sovereignty,” Putin added.

People will be seen at a McDonald's restaurant in Moscow on March 9, 2022.

unemployment

Part of Russia responds to the withdrawal of Western brands with dark humor.New memes are making rounds It suggests that IKEA’s giant gorgeous sharks, which were previously popular in Russia, should have been stockpiled, and that McDonald’s food is now sold on eBay and Craigslist’s equivalent Avito. On social media.
Chinese amateur investors are betting a lot of time on boosting Russia's trade
1 Twitter user Post Pictures of people lining up outside Pushkin Square McDonald’s in 1990. Ironic caption (Russian): “Opening of McDonald’s restaurant in Moscow, March 2025”.

Nevertheless, the symbol of the withdrawal of the world from Russia will have emotional and psychological implications, Chamorro-Premuzic said.

“It’s the fact that you’ve become the number one public enemy, not the functional loss of paying more for furniture or not drinking your favorite burgers or coffee. Bad leaders and tyrannical With a ruler, the citizens of the country are suffering. Many. “

Chamorro-Premuzic added that unemployment could continue if a company decides to shut down permanently rather than simply shutting it down. He said.

But this does not mean that these companies will say goodbye to Russia forever. Of course, “in the event of significant political, governmental, or reputational changes, businesses can return very easily,” says Chamorro-Premuzic.

“Of course, because it’s a big market for businesses, there’s an incentive to go back the same as when they first went there. So, if there’s no moral or brand reputation impediment, they’ll come back.”

Meanwhile, according to Putin, Russia and Belarus will overcome the difficulties posed by sanctions and “will gain more abilities, become self-reliant, feel self-sufficient and ultimately gain more opportunities to profit. [from them], Like the previous year. “

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