The end of an era in Russia where sanctions and Western companies are flirting with their way to escape

McDonald’s first restaurant on Pushkin Square, known as Pushkinskaya Square to the Russians, seated 700 diners and was for years the company’s largest outlet anywhere in the world. Young middle-class Russians who grew up in the 90s saw McDonald’s as a cool, foreign-friendly restaurant where you could take friends to celebrate special birthdays.

As the 21st century progressed, the chain seemed a less effective symbol of American culture, but it remained a favorite place for Russian college students to meet for affordable lunches or dates, and offered a quick, cheap dining option for others. Its branches have also provided job opportunities to tens of thousands of Russians.

All of that is gone now, at least for the foreseeable future. “Our values ​​mean that we cannot ignore the needless human suffering unfolding in Ukraine,” McDonald’s CEO Chris Kempczynski said in a letter to employees on Tuesday announcing the company’s suspension of its operations in the country. He added that it was “impossible to predict” when his restaurants would reopen. CNN has reached out to McDonald’s to confirm the final closing date for its restaurants but has yet to receive a response.

“Whether it will be the end of an era or not, it is difficult to say at the moment, many observers fear that this is the end of an era, and it will depend on how long it will take Russia to get past the difficult, dark and poisonous authoritarian regime- We are also quite clear that Getting away from this will take a lot of effort – social, political, economic and leadership.”

reputation hurt

Many Russian citizens are still traumatized by the events of the past two weeks. With the state tightly controlled news coverage of the war, it is difficult to assess exactly how much their world has changed with the imposition of Western sanctions.

Obviously, the most immediate impact will be on those working for Western companies who have halted operations, despite promises of continued support from employers.

Swedish furniture giant IKEA, which first opened its doors on Russian soil in 2000 and now has 17 stores across the country, said its decision to halt all exports and imports to and from Russia and Belarus and halt all IKEA operations in Russia would have a direct impact. over 15,000 workers.

“The ambitions of the company’s groups are long-term and we have worked to secure employment and income stability in the near future and provide support to them and their families in the region,” IKEA said in a statement.

For other Russians, the effect is likely to be depressing on two levels, though less direct, said Thomas Chamorro Primuzic, professor of business psychology at University College London. First, they will lose access to the products and services they enjoy — but also, and perhaps more painfully, feel reputational hurt by being “ostracised from the world, denigrated,” he said via email.

Shervutdinova notes that the response will, of course, differ across different segments of Russian society. Some of the companies that suspended their operations in Russia are luxury brands whose products were out of reach for the vast majority of Russians.

But others, such as IKEA, Starbucks, or even McDonald’s, “were places visited, used and consumed by the middle classes of Russia” in urban areas on a regular basis, she said, and their loss would affect large numbers of people. “There will be alternatives, but it is another symbol of the middle class for the Russians and they will lose that access,” she said.

Shervutdinova added that outside of those urban areas, where opinions are more global, the response is likely to be the challenge in the face of sanctions, as the West is seen as turning against Russia.

These Russians “will see themselves as some kind of Russian patriot who cares about Russia’s national interests, because that’s what the government is offering… they’ll be up for the challenge and they’re going to strengthen behind the leadership and say, ‘Well, it’s better that we’re going to build our economy.'”

Russian President Vladimir Putin insisted on Friday that Western sanctions represented an opportunity for Russia’s $1.5 trillion economy, the world’s 11th largest.

“Recent years have shown that wherever Westerners impose restrictions on us, we acquire new competencies and bring old ones back to a new technological level,” Putin said, speaking alongside Belarusian leader Alexander Lukashenko in Moscow.

“This is a time of opportunity to move towards strengthening technological and economic sovereignty,” Putin added.

Job loss

However, Chamoru Primozic said that the symbolism of the world’s withdrawal from Russia will have an emotional and psychological impact.

“It’s not really about the job loss of paying more for furniture or not having your favorite burger or coffee, but the fact that you’ve become public enemy number one. With any bad leader or tyrannical ruler, it’s the citizens of the country who have the bone.”

Chamorro Primuzic added that job losses may also follow if companies decide to permanently close operations, rather than simply suspend them. “These are big employers and just as they created many jobs when they come in, the jobs will go if they leave,” he said.

But this does not mean that those companies will say goodbye to Russia forever. Chamorro Primozic said companies can of course “return easily if there are significant policy changes, government changes, and reputational changes”.

“Of course it’s a big market for companies, so they’ll have the same incentive to go back than they had to go there the first time. So, if there’s no ethical or brand reputation barrier, they’ll come back.”

In the meantime, according to Putin, Russia and Belarus will overcome the difficulties imposed by the sanctions and will also gain more competencies, more opportunities to feel independent, self-sufficient and ultimately benefit. [from them]As it was in previous years.”