The Starbucks logo and McDonald’s Golden Arches are being dismantled in Russia as the coffee and fast-food chains both withdraw from the country over the war in Ukraine. But Russians are still getting their fill of American fare like burgers and pizza, as Hard Rock Cafe and Sbarro are among the more than two dozen U.S. corporations that continue to do business as usual in Russia.
Twenty-seven U.S-based companies are defying calls to exit or curtail their activities in Russia, according to a running tally by Yale University management professor Jeffrey Sonnenfeld and his research team.
While Starbucks and McDonald’s have both announced their complete withdrawals from Russia in recent days, Hard Rock continues to operate its Hard Rock Cafes in Moscow and St. Petersburg, Russia. The company, acquired by the Seminole Tribe of Florida in 2007, did not respond to requests for comment.
Another purveyor of fast food, U.S. pizza chain Sbarro, is also staying put. Operating Russia since 1997, the privately held company signed a new franchise deal in the country in 2017. It has partnered with Horeca Band Group and plans to open more than 300 Sbarro restaurants in Russia by 2027. It did not respond to a request for comment.
It’s not only food chains that are “digging in,” according to Sonnenfeld. The owner of online dating services Match.com and its Tinder unit continues to do business in Russia, with executives at the dating company saying in an earnings call earlier this month that it expects to lose about $10 million in revenue every quarter as long as the Russian war in Ukraine continues.
“European performance was impacted by the Russian invasion of Ukraine, which reduced revenue in Russia, Ukraine and several other nearby countries,” said Gary Swidler, Match’s chief operating and financial officer.
Dallas, Texas-based-Match Group did not respond to a request for comment.
Dating app Bumble made a different decision. In March, the social networking platform said it was ceasing operations in Russia and removing its apps from the Apple App Store and Google Play Store in Russia and Belarus.
Some companies regarded as among the worst offenders by Sonnenfeld and his team dispute the notion that they are conducting business as usual because they have not withdrawn from Russia.
Lake Forest, Illinois-based Tenneco, a supplier of automotive components, opened a manufacturing facility in Togliatti, Russia, in 2003, and an emissions plant in St. Petersburg, Russia, four years later. The company now has four plants in Russia, with two idled. “The other two we have ceased communication with and have no information on their status,” Tenneco said in an emailed statement.
Tenneco is complying with international laws and sanctions and has suspended cross-border shipments, with no raw materials, components or finished products going in or out of Russia or Belarus, it said.
“We remain focused on the health and safety of our people in Ukraine, Russia and other affected areas. We will continue to provide updates and do what we can to help our team members, customers and suppliers get through this situation safely as we hope for a peaceful resolution,” the company stated.
Another company, Des Moines, Iowa-based food additives supplier Kemin Industries, defended its ongoing operations in Russia as doing its part to offset hunger, including in Ukraine and Russia.
“With the long-held conviction that weaponizing food is abhorrent, Kemin continues to do its part to help feed people and assist crippling food insecurity magnified during a time of war,” the company said in a statement to CBS MoneyWatch. “Along with continuing to support employees in the region,” added the company, which formed a Russian subsidiary in 2016.
Domino’s Pizza’s nearly 200 stores in Russia remain open, with DP Eurasia, the owner of the master franchisee for Domino’s in Russia saying it has suspended additional investment for now and won’t accept royalty payments from its Russian operations until further notice.
“There has been no material disruption to the group’s operations in Russia from the ongoing situation in Ukraine. Trading from the group’s 188 stores continues and the group remains dedicated to the communities it serves. The board has, however, determined it prudent to limit any further investment into its operations in Russia and will keep this under review going forward in light of the geopolitical situation,” the company said in releasing financial results in April.
The stance places it in the “Buying Time” category devised by Sonnenfeld, with a “D” grade for its decisions.
Still in Russia
Here’s a rundown of the other American companies that are getting an “F” grade from Sonnenfeld for their decisions regarding their operations in Russia.
- Aimbridge Hospitality. The Plano, Texas-based hotel management company operates more than 1,400 properties in 49 states and 20 countries, including ongoing operations in Russia.
- Align Technology. The Tempe, Arizona-based medical device maker this month referenced the conflict in Ukraine as among the factors that could “adversely impact our commercial and research and development activities inside and outside of Russia.”
- Amdocs. Founded in Israel, the information technology company is headquartered in Jersey City, New Jersey, and is “still cooperating with Russian partners,” according to Sonnenfeld. The company called its exposure to Russia and Ukraine immaterial and roughly 1% of revenue, CEO Shuky Sheffer said in an earnings call on May 11. Amdocs complies with applicable U.S. sanctions on Russia and has stopped new sales of its products and services in the country, he said.
- Amgen. The Thousand Oaks, California-based drugmaker opened an office in Moscow in 2006, and the company’s activities currently cover the entire territory of the Russian Federation, from Kaliningrad to Kamchatka, according to its website.
- Avaya. The information technology company is still supporting its Russian partners. The military conflict, sanctions and export controls imposed by the U.S. and other countries “severely limit our ability to conduct commercial activities with Russian companies, organizations and individuals on the U.S.,” the company said in a regulatory filing. It expects to lose $45 million in anticipated revenue in Russia this year, and another $15 million as other countries shift priorities because of the war.
- Cloudfare. The San Francisco security and web performance services provider is complying with sanctions, but decided against terminating its services inside Russia. “Russia needs more internet access, not less,” Matthew Prince, the company’s co-founder and CEO, wrote in March. “We believe removing our services from Russia would do more harm than good,” a spokesperson told CBS MoneyWatch in an email.
- Donaldson Co. The Bloomington, Minnesota-based manufacturer of industrial air-filtration systems continues sales to Russia.
- Fleetcor. The Atlanta-based provider of payment services for transportation companies has about 600 employees in Russia, and continues to conduct business as usual.
- Forever Living Products. The privately held multilevel marketing company based in Scottsdale, Arizona, is still operating in Russia.
- Huntsman Corp. The Woodlands, Texas-based maker of industrial chemicals is still operating in Russia.
- International Paper. The Memphis, Tennessee-based company in March said it might sell its 50% stake in a major Russian forest products company, but would continue operations in the country.
- IQVIA. The Danbury, Connecticut-based provider of medical analytics is still operating and actively hiring in Russia.
- Koch Industries is still operating in Russia. Guardian Glass, a subsidiary of the Wichita, Kansas, industrial conglomerate, is working with its local managers in Russia “to find an exit strategy” that also ensures the safety of their roughly 600 employees, Koch President Dave Robertson told employees in a memo last month.
- Medtronic. The Minneapolis, Minnesota-based medical device company continues to operate a subsidiary in Russia. The company in April condemned the Russian invasion of Ukraine and said it would continue to support essential business activities that supply its life-saving and sustaining products. The company is not making new investments or starting new clinical trials in the country.
- Paccar. The Bellevue, Washington, truck maker is still active in Russia. The company has suspended truck and parts sales in Russia and Belarus to comply with international sanctions, and manages export sales to the country through independent dealers and a third-party-owned warehouse, it said in a regulatory filing. It sold 2,500 trucks into Russia and Belarus last year.
- Riot Games. The company is still operating and selling products in Russia.
- Stryker. The Kalamazoo, Michigan-based orthopedics device maker continues sales and imports to Russia.
- TGI Friday’s. The company is still operating in Russia. The Dallas, Texas-based restaurant chain in March said it would donate franchisee fees from its restaurants in Russia to Ukraine relief efforts.
- Titan International. One of the largest manufacturers of off-road tires and wheels, the Quincy, Illinois-based company is still operating in Russia. The company halted investment in its Russian operations and is running its southwest Russia facility at reduced capacity to comply with international sanctions, the company said in a regulatory filing. Its Russian operation represents about 5% of consolidated global sales for the first quarter ending March 31.
- Tom Ford. The New York-based fashion house opened its first store in Russia in 2011 and is still operating in the country.
- Valve Corp. The Bellevue, Washington-based entertainment software and technology company behind the Steam gaming platform is still providing services to Russia.
- Zimmer Biomet. The Warsaw, Indiana-based medical device maker continues sales in Russia. The company in March stated that it had customers, distributors and employees in both Ukraine and Russia, and was focused on maintaining contact and offering support to all. The company condemned the invasion of Ukraine in an emailed statement to CBS MoneyWatch. “We are presently continuing to supply hospital and care teams in Russia,” with a portion of profits from the sale of its products in Russia going to Ukraine relief efforts, a spokesperson stated.