Why McDonald's May Have To Toss Millions Of Dollars Worth Of Food

After much public protest and social media campaigns, McDonald's finally made the decision to shutter the doors of its Russian restaurant locations after the country's invasion of Ukraine, according to CNN. It was a move that cost the fast-food giant $127 million last quarter, with $100 million of those losses accredited to food and supplies that are going to waste.

When the closures were first announced, Business Insider noted the emergence of a Big Mac black market online. Popular menu items like cheese burgers, fries, and chicken nuggets went up for sale at ridiculously high prices as Russians attempted to sell off food before it went bad. Even plastic cutlery, sugar packets, and other supplies with the recognizable logo were being auctioned off to the highest bidders.

Despite closing locations in Russia and Ukraine, McDonald's continued to pay 62,000 Russian employees, as well as many in the Ukraine, and suppliers in both countries, costing the burger chain $27 million in salaries, leases, and supplies.

McDonald's is working to reduce food waste, despite its challenges overseas

According to the Chicago Tribune, McDonald's expects to lose $50 million in monthly sales after closing 850 Russian restaurant locations in March. The fast-food chain was hit hard with $100 million in wasted food and inventory, offsetting the company's efforts to reduce food waste globally.

From January through May, sales increased by 11% at McDonald's locations in other countries loosening pandemic restrictions and helped the company bring in nearly $100,000 more than experts projected, via FactSet. McDonald's own first quarter report noted that its earnings per share had decreased by 28%, and clarified that the figure excluded the costs used to support the company's ongoing costs in Russia and Ukraine. The burger giant is relying on sales in other countries to offset its losses in Russia and Ukraine.

McDonald's works with global suppliers and franchise owners to identify programs and charities they can partner with to reduce food waste and help communities in need. Despite closing locations in Ukraine, Eat This, Not That! says that the chain continues to use its restaurant kitchens to distribute food and pre-made meals to Ukrainian soldiers and civilians.