The check-out line in Russia is pretty crowded these days. They’re all there: McDonald’s, Goldman Sachs, Starbucks, Boeing, Coke, Exxon and the list goes on and on. All of these big U.S. and multinational corporations have announced they are pulling out of the Russian marketplace in response to the country’s brutal attack on Ukraine. The wide-scale condemnation is virtually unprecedented in its scale and speed in modern business history.
Now it raises the question: What happens next?
Even as the war in Ukraine gets ever more destructive and aggressive – and of course, remains far more distressful in the loss of human live than any business considerations – eventually it will end or at least move from war-like conditions to something resembling more like a questionable ceasefire. That’s when these big international brands will have to decide what they are going to do.
For retailers, the decision will be very visible. If they decide to return and begin operating their clothing stores and fast-food restaurants again, everyone will see it and they will run the risk of customers elsewhere around the world taking offense and perhaps organizing boycotts. And if they walk away permanently – or at least for periods of years – they will lose these businesses, either to Russian nationalization or simply to neglect-driven shutdowns. It is not a great choice with no easy answers.
For less public-facing companies like Goldman or Exxon or Boeing, the situation is somewhat different. The typical westerner is not going to know if these kinds of companies restart operations in Russia since so much of it will happen behind the scenes. If investment companies begin loaning money, financing deals or otherwise engage in financial activities, who will really see it.
It’s why retailers and restaurants are truly on the front lines of this Russian pull-out. And the stakes are high. Starbucks has 130 locations in Russia. McDonald’s has far more, some 850. H&M has 150 stores, Uniqlo about 50. We’ve never seen politically motivated withdrawals out of nations on this scale before. So it’s unclear how it will turn out.
Compared to what is happening to the people of Ukraine it is insignificant. But for these companies it is not.