To this?
No more jobs with McDonalds?Guess the work force will go to fishing, sealing and whaling in the winter, and will go Viking in the summer, just like the old days!
Posted on 10/26/2009 6:26:18 PM PDT by TopQuark
REYKJAVIK (Reuters) – McDonald's Corp (MCD.N) will shutter its business in Iceland because it is too expensive for the franchise to operate after the country's financial crisis.
The world's largest fast-food company said on Monday that all three of its restaurants in Iceland, operated by franchisee Jon Ogmundsson, would stop operating at midnight on October 31.
Ogmundsson has run the McDonald's restaurants since 2004. He told Reuters that the decision to close the restaurants was mainly due to the severe depreciation of the Icelandic krona and high taxes on imported food.
Instead, he
Iceland's banks collapsed at the height of the global credit crisis, devastating the country's economy and leaving it dependent on a $10 billion aid package led by the International Monetary Fund.
Ogmundsson said the cost of raw materials used in McDonald's meals had doubled in the last 18 months, and that there was little hope Iceland's economy would pick up enough to make the business viable.
"McDonald's Europe said in a statement that it would not seek a new partner in Iceland due to the state of its economy and the complexity of doing business there."
It's not like Iceland is a polar wilderness devoid of life or something. Stuff is there ~ moving around ~ growing ~
So what exactly can they afford to eat in Iceland?
They don’t tax the locally grown food like the stuff he is required to import from Germany. Iceland steps in and tariffs the heck out of it.
MCd cannot risk their reputation on a guy with 3 restaurants to source and manufacture food as McDonalds in Iceland so their hands are tied.
reindeer and fish
Can they grow potatos? I bet he could convert his stores to McFish n Chips using local foodstuffs.
I have had the privilege of traveling to many of the Scandinavian countries, to include Iceland. While they are all breathtakingly beautiful, Americans would find it hard to believe the oppressive “sin taxes” levied on everything from Alcohol to bubblegum, to just about anything in between that contains sugar, fat or booze. It is wildly expensive to visit. I can’t imagine how anyone could live there and actually enjoy life.
Uh, Government cannot help that it’s an island in the middle of nowhere. Maybe you can blame the Government for a worthless currency, but logistics plays a big part of the cost.
I think there’s one sin they don’t tax......
To this?
No more jobs with McDonalds?Guess the work force will go to fishing, sealing and whaling in the winter, and will go Viking in the summer, just like the old days!
I was there in 1999 and I thought Toyko and Japan in General was expensive. Ha-Ha, price sticker shock: Iceland - specifically my stay in Reykjavik: I wanted breakfast but there were no diners, so we managed to stumble on a hole in the wall sandwich shop where a anemic-little-bitty sandwich, with a hamster size portion of lettuce and ham went for Eight freakin dollars!!!!!! Well, needless to say an hour or two later I was starving so we went to a Mcdonalds there where I had a Quarter Pounder with Cheese Meal that costs me Eleven freakin dolllars. All your money will go for food there, no joke. The overall experience good but not lively, the people were not smilers, civil but not warm, akin to ice water.
Trick or treat...
Ping to post #12
rum flavored ice.
Some enterprising person should introduce Icelandic hot dogs (Pilsa) with all the fixings to the United States hot dog market. There is nothing like it in the world.
I did not question the fact that the prices are higher than, say, in Europe: being an island, the country imports everything.
The point was that McDonald' had been there before but had to exit now. What has changed? Taxes and government rules. The company did not sight taxes as the reason but "complexity" --- regulatory burdens. I am sorry you missed that in the post, although it was highlighted.
I didn't see anything indicating that these taxes were new, and "complexity" can cover a lot of territory other than regulatory burdens. Logistics has to be a nightmare, when you have to import virtually everything. Now, all of that was worth putting up with when the Icelandic krona was a hot currency, but now, wildly devalued, it's going to be a lot less attractive to use them to pay for and ship all those ingredients to a rock in the middle of the North Atlantic.
Another article on the subject here says as much.
Mr. Ogmundsson owns the country's three McDonald's restaurants and he plans to close them all this week. He says Iceland's troubled currency, the krona, is to blame. It has lost almost 70 per cent of its value against the euro in the last 18 months, driving up the cost of imports including the beef, cheese and special sauces Mr. Ogmundsson brings in from Germany.“With the collapse of the Icelandic krona, our food costs have doubled,” he said Monday from Reykjavik. “Business is good, but the bottom line is not sexy.”
Mr. Ogmundsson charges about 650 kronur for a Big Mac, roughly $5.50 (U.S.). He said he would have to increase the burger's price by 30 per cent just to cover the added input costs. “We have not been able to increase prices as we would need,” he said. “Customers are not willing to pay more.”
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