In Iceland, McDonald’s closes its arches
Big Mac by Phil Dragash on Flickr
After 16 years in the North Atlantic nation of Iceland, McDonald’s is closing its doors. All three McDonald’s outlets are shutting down, likely forever. Jon Gardar Ogmundsson, owner of Lyst, the firm that runs Iceland’s McDonald’s franchises, explains that the logistics of providing McDonald’s meals to an isolated island with a population of 300,000 are quite costly. Many of the ingredients are imported from elsewhere and this fact, combined with the falling krona, makes fashioning a big mac incredibly expensive.
Lyst predicts that, were the franchises to stay afloat, they would have to raise the price of a Big Mac to 780 kronur, or USD 6.36. According to The Economist’s “Big Mac Index” for February 2009, even the most expensive Big Mac’s, sold in Norway, Switzerland, Denmark, and Sweden, were priced at USD 5.79, USD 5.60, USD 5.07, and USD 4.58 respectively. To cut costs, Lyst plans to continue to run the franchises under a different name and rely on more domestic, Icelandic products.
[Bloomberg link via Rachel Lauden]
