McDonald’s Corporation - Out of Iceland
The world’s one of the most loved and admired company McDonald’s Corporation (NYSE:MDC) is pulling out its operations from Iceland. McDonald’s has decided to close its stores and had no plans to return. Iceland is going through a huge financial crisis and this has made it very expensive to operate its franchises. Besides the economy, McDonald’s blamed the “unique operational complexity” of doing business in an isolated nation with a population of just 300,000.
There is only one company in Iceland which operates all the franchises of McDonald’s Corporation i.e. “Lyst”. The owner of the firm Mr. Jon Gardar Ogmundsson said that the decision was “not taken lightly”. He told that stores imported the goods from Germany and the cost has almost doubled, with the falling Krona, currency of Iceland.
Mr Ogmundsson said the restaurants had “never been this busy before… but at the same time profits have never been lower”. “It just makes no sense. For a kilo of onion, imported from Germany, I’m paying the equivalent of a bottle of good whisky,” he added. Almost all the Iceland’s banks ran into losses at the height of the global credit crisis - devastating the country’s economic condition and forcing it to rely on an $10bn (£6.1bn) international aid package.