McDonald's pulls out of Iceland

Tabnabs

An interesting and humorous article.

McDonald's is to close its business in Iceland because the country's financial crisis has made it too expensive to operate its franchise.

The fast food giant said its three outlets in the country would shut - and that it had no plans to return.

Besides the economy, McDonald's blamed the "unique operational complexity" of doing business in an isolated nation with a population of just 300,000.

Iceland's first McDonald's restaurant opened in 1993.

'No sense'

“ For a kilo of onion, imported from Germany, I'm paying the equivalent of a bottle of good whisky ”
Jon Gardar Ogmundsson McDonald's Icelandic franchisee

The franchises are run by a firm called Lyst, with owner Jon Gardar Ogmundsson saying the decision was "not taken lightly".

He said that the restaurants imported the goods from Germany, but that costs had almost doubled, with the falling krona making imports prohibitively expensive.

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.

He now plans to run the restaurants under another name so that he is able to buy cheaper Icelandic products.

Iceland's banks collapsed at the height of the global credit crisis - wrecking the country's economy and forcing it to rely on an $10bn (£6.1bn) international aid package.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8327185.stm

acer911

Poor Poor Iceland, this will be a major loss to there society alrite.... *cough, cough*:D

ei.sdraob

hmm fast food joints like MCDonnalds

are actually doing record profits thanks to the recession

as people eat cheaper junk

things must be fairly bad so



this is another reason against devaluation (which was involuntary in Iceland), anything that needs to be imported into the economy becomes very expensive

Captain Furball

He now plans to run the restaurants under another name so that he is able to buy cheaper Icelandic products.

And if everyone did things like that, we'd be all in a job.

ednwireland

must cost a fortune to run a mcd's in iceland practically everything would have to be shipped in, great country though

bit more thinking like that wouldnt go amiss in many places (he said cooking with donegal rapeseed oil )

l guess they are so expensive and i'm guessing the currency completely collapsed so imports must be costly. hence their sudden application to join the eu on 16 july this year

Long Onion

Bad month for Iceland, they are still getting over the loss of Kerry Katona.

LostinBlanch

Here's the Icelandic view.

They don't seem too disappointed.

ei.sdraob

LostinBlanch wrote: »

Here's the Icelandic view.

They don't seem too disappointed.

would you be? myself and others avoid mcdonalds and other junk restaurants

Overature

i thought it said Ireland in the thread title, im so relived that i made that mistake

SkepticOne

From the article it appears that the business itself is still viable but that McDonalds franchises are tied into uneconomic deals with suppliers in Germany even though local alternatives are available. Fair play to the owner for telling McDonalds where to go.

Nody

SkepticOne wrote: »

From the article it appears that the business itself is still viable but that McDonalds franchises are tied into uneconomic deals with suppliers in Germany even though local alternatives are available. Fair play to the owner for telling McDonalds where to go.

That is not a McDonald thing really but goes for most franchises; it is part of keeping every meal tasting the same any where in the world.