Some people think it is absolutely brilliant that McDonald’s is packing up its Big Macs and leaving Iceland.
They fail to see the big picture.
Crap burgers and awesome milkshakes aside, an operating McDonald’s in a country is a sign of active participation in a global community.
It is surely no coincidence that McDonald’s arrived in Iceland at the dawn of Iceland’s participation in the EEA. And it is surely no coincidence that McDonald’s is leaving in wake of the economic crisis.
While some might see the golden arches as an evil part of globalization, the larger implications should not be ignored. Having some uniformity worldwide is beneficial to compare the real economic and political situations of countries.
The McDonald’s Theory of conflict prevention
What is it about McDonald’s that creates peace? The simple answer is that a country that has stabilized to the point where someone is willing to invest close to a million dollars per store in a franchise operation is very unlikely to be a threat to its neighbors, or have neighbors who are a threat to it. McDonald’s restaurants are owned by the mother corporation, or by individual franchisees. Neither one is interested in seeing riots, corruption nor banditry destroy their investment. American towns and other countries have to earn their McDonald’s.
The Big Mac Index is published by The Economist as an informal way of measuring the purchasing power parity (PPP) between two currencies and provides a test of the extent to which market exchange rates result in goods costing the same in different countries.
The peace theory has been under fire, pardon the pun but the Big Mac Index has been indicative of economic trends. So Ronald McDonald’s decision to give up on Iceland is actually a sign of how royally messed up things have become. Some people are talking about positive effects on culinary culture in Iceland.
But the thing is that we didn’t chase McDonald’s out of the country, McDonald’s decided to leave us. If it had been the other way around then maybe we’d be seen in a similar positive light as Jose Bové and the French farmers who have protested the restaurant’s ethics and effects on cusine. But McDonald’s packing its bags leaves us as the village idiots of the world.
They just don’t see it feasible in the long run to conduct business in this country.
And that is no laughing matter, whether you like their burgers or not.
Note: McDonald’s in Iceland is a franchise operated restaurant. We might just be witnessing the classic case of an Icelandic business so in debt that it must re-organize or die. We will see whether a new player sees the opportunity to bring the golden arches back into the market. With import costs and tariffs the way they are, and McDonald’s importing most of their supplies it should be interesting to see how this plays out.
See also:
Iceland is so messed that McDonald’s is giving up and going home
McDonald’s closes in Iceland after krona collapses
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Knute Rife
2 years ago
Um, these were franchises, not corporate-owned restaurants. McDonald’s didn’t shut them down, the franchisee decided to convert them into something more profitable. And the Economist was one of the principal cheerleaders of the methods that created this mess, so how wise is it to buy into what it decrees is economically significant? A Big Mac carry trade? Really?
McDonald's Leaving Iceland | iceland today
2 years ago
[...] Read the rest here: McDonald's Leaving Iceland [...]
Melvin Godfried
2 years ago
How right you are! Metro, the replacement, will be selling the same unhealthy menu under a different name. Albania, Armenia and Bosnia and Herzegovina are the only other European nations sharing this position. What a shame!
Dadi
2 years ago
Knut, that is absolutely right…McD’s in Iceland is franchise operated.
In this post the franchise operators are assumed as the McD’s models reps towards the Icelandic business environment.
Maybe someone else will see a gap in the market to get the franchise going again. That might indicate some trust in the economy.
Dadi
2 years ago
…and Melvin, you get it. McD’s exit doesn’t herald a period of better eating habits in Iceland. You can have your pick of overweight Icelanders who never eat at McD’s.
Compare Big Mac with the fare served up at N1′s joints around the country and you’d run towards the golden arches.
My preference would be the heaven in a bun served by Hamborgarabullan but I don’t pity anyone who likes BigMac. People do have a choice where they eat.
As a marketing person, I have always thought Icelandic restauranteers could learn quite a lot from the way McD’s operates. Speed of service, consistency in quality, respect for customer, cleanliness. Things you might not be assured of when entering an Icelandic restaurant or franchise that has limited operation guidelines.
the point though is that this is not about burgers but about economics and political stability…
Paul H
2 years ago
I read one article that said 10-15 new jobs will be created by Metro.
And Icelandic products will replace the imported ones.
Surely this is a positive change?
Better for the environment, better for Icelanders.
I haven’t had Mickey-D’s in years, and don’t plan on ever having any more.
I’d like to see some lambakjöt based products replace the McRubbish.
I cannot get enough of the stuff.
I eat all I can when I am in Iceland.
And for a touch of variety I nom on hangikjöt or hangikjötsalat in korn brauð.
And whilst Mickey-D’s is leaving Iceland, a load more tourists are arriving.
Just trying to look on the bright side here, as I think there is one.
Dadi
2 years ago
Paul H. Those supposed jobs will only be sustained if people come to eat their burgers.
I have even less desire to eat at Metro than I have for McDonald’s.
Dadi
2 years ago
and I really don’t care for lamb meat even if you do. I think people should worry less about what other people like to eat.
McDonalds in Iceland : Iceland Flights
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Kef
2 years ago
Are Icelanders going to McDonalds in these last few days now, more than ever before ?, just to get one last happy meal ?
Dadi
2 years ago
The busiest week in McDonald’s history I suppose…
James
2 years ago
I don’t see this a real disaster and I foresee the Arches returning eventually due to public demand in the future. I personally don’t see having a McDonald’s as a real sign of prosperity and feel as though this could have created a space for the entreprenurial types to “fill the void”.
When I first came to Iceland I was actually quite impressed by the lack of a McDonald’s downtown, to foreign visitors especially, it does kind of connote an air of “independent”.
Basically, it’s all down to money, they franchisee couldn’t afford to keep it open and make a profit, I have no idea who Metro are though! I don’t see every flocking to Búllan unfortunately as last time I checked the price gap is still quite large.
one
2 years ago
The idea you cannot have prosperity without a Mc Donalds is pure rubbish that could only be spouted by a corporate american empire enthusiast. In England in picturesque towns they are often refused a store on the grounds that they degrade the areas character. And its a great thing too! Good luck Iceland, and its a good thing getting rid of the clown. you don’t need the american clown, you are more than that, you have your own heritage!
Dadi
2 years ago
one, businesses are going out in Iceland because their grounds for operation are lost, not because we choose to.
The Icelandic heritage you speak of is probably N1′s cuisine. Icelandic culinary tradition is just as poor as our urban planning (although the former has taken leaps and bounds in the last couple of decades, while the latter hasn’t).