Economic collapse forces McDonald’s out of Iceland
All McDonald’s restaurants in the country of Iceland will be closed by month’s end as franchise holder Lyst ehf saw profits eroded by the collapse of the Icelandic kroner.
The plummeting currency forced prices of ingredients up considerably for the franchise holder as most of their goods have to be imported.
“We would have to raise our prices by 20 per cent to get the margin needed on our products,” Magnus Ogmundsson, Lyst ehf CEO, told Bloomberg. “That would have sent a Big Mac to 780 kronur (A$7).”
“Our competitors all use domestic meat and lettuce and so on, while we are flying in these materials, which is extremely expensive,” he added.
The island country has three McDonald’s restaurants and has had the golden arches in their country since 1993.