Domino’s Pizza to Close All Outlets in Russia, Following McDonald’s and Starbucks
Domino’s Pizza has announced that it will be shutting down all its outlets in Russia, making it one of the first major Western fast-food chains to exit the country since McDonald’s and Starbucks left over a year ago. The company’s franchisee, DP Eurasia, which holds the rights for Domino’s Pizza in Russia, Turkey, Azerbaijan, and Georgia, revealed that it plans to file for bankruptcy for its Russian unit, DPRussia.
The decision further underscores the difficulties faced by Western companies in operating in Russia amid the ongoing Ukraine war and actions by the Kremlin. These factors have made it increasingly challenging and costly for companies to continue selling their businesses in the country. With 142 Domino’s Pizza stores in Russia, the company currently holds the third-largest market share in the country’s pizza delivery industry.
Concerns loom over the financial consequences of the potential insolvency. However, it is still premature to determine the exact impact of this development. It is worth noting that previous instances involving McDonald’s and Starbucks saw the pizza outlets continuing their operations under new ownership and rebranding. Therefore, it is possible that a similar outcome may occur in this case as well.
The situation in Russia has not been welcoming to foreign companies. According to researchers at Yale University, over 1,000 international firms have either exited or suspended their operations in Russia since the beginning of the country’s invasion of Ukraine. While 378 companies from around the world are still conducting business in Russia, many have chosen to halt new investments and reduce their activities in the country.
The closure of Domino’s Pizza outlets in Russia highlights the ongoing challenges faced by Western companies seeking success in the Russian market. Despite some companies choosing to persevere, others find it increasingly difficult to navigate the geopolitical landscape and maintain profitable operations in the country. As the Russian market continues to evolve, it remains to be seen how other foreign businesses will navigate these same challenges.
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