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10-26-2009, 01:44 PM
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#1 | | y'all better put some respeck on my name
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| Iceland says goodbye to the Big Mac, Mc D's
McDonald's closes in Iceland as currency collapse takes a bite out of Big Mac profits
* By Gudjon Helgason and Jane Wardell, Associated Press Writers
* On 3:41 pm EDT, Monday October 26, 2009
o
Buzz up! 37
o Print
REYKJAVIK, Iceland (AP) -- The Big Mac, long a symbol of globalization, has become the latest victim of this tiny island nation's overexposure to the world financial crisis.
Iceland's three McDonald's restaurants -- all in the capital Reykjavik -- will close next weekend, as the franchise owner gives in to falling profits caused by the collapse in the Icelandic krona.
"The economic situation has just made it too expensive for us," Magnus Ogmundsson, the managing director of Lyst Hr., McDonald's franchise holder in Iceland, told The Associated Press by telephone on Monday.
Lyst was bound by McDonald's requirement that it import all the goods required for its restaurants -- from packaging to meat and cheeses -- from Germany.
Costs had doubled over the past year because of the fall in the krona currency and high import tariffs on imported goods, Ogmundsson said, making it impossible for the company to raise prices further and remain competitive with competitors that use locally sourced produce.
A Big Mac in Reykjavik already retails for 650 krona ($5.29). But the 20 percent increase needed to make a decent profit would have pushed that to 780 krona ($6.36), he said.
That would have made the Icelandic version of the burger the most expensive in the world, a title currently held jointly by Switzerland and Norway where it costs $5.75, according to The Economist magazine's 2009 Big Mac index.
The decision to shutter the Icelandic franchise was taken in agreement with McDonald's Inc., Ogmundsson said, after a review of several months.
"The unique operational complexity of doing business in Iceland combined with the very challenging economic climate in the country makes it financially prohibitive to continue the business," Theresa Riley, a spokeswoman at McDonald's headquarters in Oak Brook, Illinois, said in a statement. "This complex set of challenges means we have no plans to seek a new partner in Iceland."
McDonald's, the world's largest chain of hamburger fast food restaurants, arrived in Reykjavik in 1993 when the country was on an upward trajectory of wealth and expansion.
The first person to take a bite out of a Big Mac on the island was then-Prime Minister David Oddsson. Oddsson went on to become governor of the country's central bank, Sedlabanki, a position that he was forced out of by lawmakers earlier this year after a public outcry about his inability to prevent Iceland's financial crisis.
Lyst plans to reopen the stores under a new brand name, Metro, using locally sourced materials and produce and retaining the franchise's current 90-strong staff.
Ogmundsson said it was unlikely that Lyst would ever seek to regain the McDonald's franchise with Iceland still struggling to get back on its feet after the credit crisis crippled its overweight banking system, damaging the rest of its economy, last October.
"I don't think anything will happen that will change the situation in any significant way in the next few years," Ogmundsson said.
It is not the first time that McDonald's, which currently operates in more than 119 countries on six continents, has exited a country. Its one and only restaurant in Barbados closed after just six months in 1996 because of slow sales. In 2002, the company pulled out of seven countries, including Bolivia, that had poor profit margins as part of an international cost-cutting exercise.
AP Business Writer Jane Wardell reported from London. AP Retail Writer Ashley Heher contributed to this report from Chicago
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10-26-2009, 01:51 PM
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#2 | | What hasn't Killed me, has made me more tolerant of RS!
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damn, guess im not going to iceland anymore
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10-26-2009, 03:02 PM
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#3 | | Revscene.net has a homepage?!
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well at least Iceland is not going to be like the states and have tons of fat ppl
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10-26-2009, 03:06 PM
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#4 | | Da Vinci's real masterpiece: The Mona Diesel
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Originally Posted by anl27  damn, guess im not going to iceland anymore | Yeah because the first thing I do when I visit Iceland is to hit up the local McD's!
Anyway, This is more of a marker of how hard hit iceland is economically. Sad really.
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10-26-2009, 03:07 PM
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#5 | | RS Operative (G)
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Wow didint see that coming Posted via RS Mobile | |
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10-26-2009, 03:11 PM
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#6 | | Rs has made me the man i am today!
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$5+ for a big mac...?
i don't think so
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10-26-2009, 03:18 PM
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#7 | | RS.net, helping ugly ppl have sex since 2001
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-3 in Iceland. +6 in China. No biggie.
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10-26-2009, 03:22 PM
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#8 | | NOOB, Not Quite a Regular!
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thats awesome i hate mcdonalds
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10-26-2009, 03:44 PM
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#9 | | Banned (BBM)
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Originally Posted by hirevtuner well at least Iceland is not going to be like the states and have tons of fat ppl | true that
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10-26-2009, 03:54 PM
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#10 | | I answer every Emotion with an emoticon
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wow, this recession is soooo bad
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10-26-2009, 04:00 PM
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#11 | | :inoutugh:
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I'm going to start importing Big Macs into Iceland.
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10-26-2009, 04:01 PM
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#12 | | RS Veteran
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I did my round of shopping in West Hollywood and one popular store I frequent was only to be found empty - as with the parking lot itself. Turns out that the recession hit so hard, the rich and the famous no longer go out anymore.
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10-26-2009, 04:06 PM
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#13 | | I *heart* Revscene.net very Muchie
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nice! time to invest in iceland! Icelandic women are HAWT.
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10-26-2009, 04:29 PM
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#14 | | Banned (ABWS)
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Originally Posted by urrh $5+ for a big mac...?
i don't think so | i'd rather have a bowl of pho
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10-26-2009, 04:36 PM
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#15 | | My AFC gave me an ABS CEL code of LOL while at WOT!
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Originally Posted by orange7 i'd rather have a bowl of pho | pho sho
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10-26-2009, 04:43 PM
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#16 | | I *heart* Revscene.net very Muchie
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Emilio Estevez > Iceland
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10-26-2009, 04:45 PM
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#17 | | Need my Daily Fix of RS
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Originally Posted by Durrann1984 pho sho | x2
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10-26-2009, 07:20 PM
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#18 | | I contribute to threads in the offtopic forum
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Originally Posted by raygunpk Emilio Estevez > Iceland | Flying-V formation  | |
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10-26-2009, 07:36 PM
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#19 | | My homepage has been set to RS
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Originally Posted by shenmecar -3 in Iceland. +6000 in China. No biggie. | fixed
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10-26-2009, 08:31 PM
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#20 | | I answer every Emotion with an emoticon
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Originally Posted by hirevtuner well at least Iceland is not going to be like the states and have tons of fat ppl | More starving to death maybe?
Damn they were fucked over.
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Originally Posted by MajinHurricane who would ban me? lol. Look at my post count. | | |
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10-26-2009, 08:36 PM
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#21 | | Resident Bullshitter
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Originally Posted by bcrdukes I did my round of shopping in West Hollywood and one popular store I frequent was only to be found empty - as with the parking lot itself. Turns out that the recession hit so hard, the rich and the famous no longer go out anymore. | I guess its only America....
When I was trying to grab lunch in Causeway Bay last saturday,The parking lot of was full at Lee Garden .... and its probably one of the most expensive public parking in HK priced at $20 for 1/2 an hour....
I ended up going to Central for lunch....
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10-26-2009, 10:28 PM
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#22 | | I *heart* Revscene.net very Muchie
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20$ CAD for 1/2 an hour? holy fuck, and didn't Iceland go bankrupt
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10-26-2009, 10:38 PM
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#23 | | Ask me about how I answered the question "How fat is TOO fat?"
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some teens and stoners are going to be pissed
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Originally Posted by toyota86 the guys over at lambo vancouver said there are 60-70 pre-orders already. don't quote me though. | | |
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10-27-2009, 07:22 AM
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#24 | | Willing to sell a family member for a few minutes on RS
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damn
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10-27-2009, 09:03 AM
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#25 | | RS.net, helping ugly ppl have sex since 2001
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Originally Posted by The_AK some teens and stoners are going to be pissed | Why? The manager is re-opening the fast food business under a different name using local products. If anything, those teens and stoners are going to get a better meal for the same price.
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