27 October 2009

If you can't stand the heat...

McDonald's pulls out of Iceland, closing their three restaurants in the economically beleaguered country, according to this report from Financial Times. The collapsed economy is only part of the story -- the other part is that most ingredients must be imported from Germany, driving up the retail prices to unaffordable levels. This is not consistent with the "V" in McDonald's strategy of QSCV. On that point alone maybe this was an overdue decision.
UPDATED 28 OCTOBER 2009: The McDonald's pullout from Iceland inspired this WSJ editorial about the dangers of currency devaluation.

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