A string of big firms have joined the growing list of businesses shutting up shop in Russia.
Popular brands have come under pressure from customers to stop profiting from the Russian market in response to the invasion of Ukraine.
A dismal day of announcements have left Russia’s economy looking more and more like a Soviet relic, an era in which Western goods were almost impossible to obtain.
Several big firms have been criticised for being slow to pull out of Russia but an announcement from McDonald’s earlier today has seemingly triggered a deluge.
The American fast food chain confirmed it is temporarily closing all of its 850 restaurants in Russia.
In a recent financial filing, the company said Russia and Ukraine contributed 9% of the company’s revenue last year.
It said it will continue paying its 62,000 employees in Russia and did not specify conditions for reopening.
McDonald’s president and CEO Chris Kempckinski said closing the stores is the right thing to do because McDonald’scan’t ignore the ‘needless human suffering in Ukraine’.
Coffee giant Starbucks Corp was the next to announce it is suspending all business activity in Russia, including shipment of its products and cafes run by a licensee.
Coca-Cola’s statement confirming it would follow suit was quickly followed up by their rivals at Pepsi Co.
Tech firms like Apple and Microsoft have already ended operations in Russia, while entertainment services like Netflix, Xbox and Spotify have also joined the boycott.
The retail sector has closed hundreds of stores, with big name firms like Zara, H&M, Ikea and Nike all pulling out of the country.
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Russia’s economy is increasingly isolated by sanctions, the crumbling value of its currency and the desire of international brands to distance themselves from associating with an economy controlled by Vladimir Putin.
The US, EU and UK have sought to ramp up the pressure on the Kremlin today by announcing new measures today designed to hit Russia’s energy industry.
Exporting gas and oil is crucial to Mr Putin’s economic plans but the tap is slowly being turned off by the West.
UK business secretary Kwasi Kwarteng announced the UK will phase out the import of Russian oil and oil products by the end of the year.
Joe Biden has announced the US will ban all Russian oil imports.
The European Union will this week commit to phasing out its reliance on Russia for energy needs as soon as possible, but filling the void without crippling EU economies is likely to take some time.
Unlike the US, which is a major oil and gas producer, Europe relies on imports for 90% of its gas and 97% of its oil products.
Russia supplies 40% of Europe’s gas and a quarter of its oil. The US does not import Russian natural gas.
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