McDonald's Shuts Down in Iceland

McDonald’s will close its doors in Iceland at the end of October. There are no plans to return. This was an article in the back pages of newspapers here in the UK yesterday. It didn’t get much headlines and people went about their business, ordering skinny lattes and munching on any one of three dozen fast food options that are available at any city, town or village here. I read the article and moved on to more interesting news like Agassi admitting use of crystal meth. But as the thought of 300,000 Icelandic people sitting down to eat their last Big Mac this week in Reykjavik lingers in my mind, it hit me that the implications of McDonald’s woes are lost to us.


Now personally, I haven’t touched any fast food since 2003, a decision I made when my weight was out of control and the need for a lifestyle change was overdue. And when I say I haven’t touched any fast food since 2003, I mean exactly that – no McDonald’s, no Burger King, no Taco Bell, no fast food whatsoever. So I don’t really care if McDonald’s shut down all their stores around the world. But the reality is that most people depend on fast food chains for a good part of their meals each week and the primary reason for that is the low cost of these meals. Lets put aside the nutritional argument as to whether this is the right thing to do, and lets focus on the economical aspect.

In the US you can get 99c menus that many struggling parents feed to their children several times a week. Young people can get by with as little as $10 a week to cover several meals thanks to cheap fast food. And there is diversity and choice - you can pick from a multitude of burger joints (Micki Ds, Burger King, Jack in the Box etc.), Fried Chicken (KFC, Popeye’s), Mexican (Taco Bell, Del Taco), Chinese, Italian and sandwich joints like Arby’s. The average meal costs less than $3.5 at these places and you get quantity and a host of chemicals that are proven to have you returning for more. From my personal experience I would argue it is as difficult to kick fast food ‘addiction’ as it is smoking and drinking.

Before you have a coronary on this last remark, hear me out. In 2003 I use to eat 3 or 4 fast food meals a week, usually McDonald’s or a competitor of theirs in Belgium, called Quick. I had my last meal at McDonald’s in spring of 2003, a last supper if you like. I ordered a Big Mac (a favorite since 1977 when my parent’s gave me my first Big Mac in Paris at the tender age of 5), a McBacon, a large fries and a large diet coke. I enjoyed every bite of that meal. But here is the point – today, more than 6 years later, I can still taste every bite of that meal in my mouth. I can do the same for other fast food meals like KFC, Taco Bell and Quick that ate years ago. They all have distinctive tastes that stay in your system forever. You can't say the same thing for that gourmet meal you had at that Michelin star joint in Leith, or London, or San Diego. The folks at these companies have figured this out. You can say the same for Doritos and Ruffles chips (crisps for you Brits). Candy bars all have the same taste everywhere in the world, regardless of where you buy them. A mars bar is a mars bar no matter where you buy it, and they taste exactly the same in Las Vegas as they do in Frankfurt. Which brings us back to the Icelandic people’s woes as they lose their little piece of globalization forever.

McDonald’s is shutting down due to the rising cost of doing business. They have 3 stores in Iceland and are busier than ever – which makes sense since the country’s economy crashed in the last year as the first and most extreme victim of financial legislation. People are struggling financially in that country and so they flock to McDonald’s where a meal is cheap. However, as economies contract and currency’s lose value, the cost of importing supplies following the crash of the krona in addition to high tariffs have doubled the cost of meat, cheese, vegetables and other products, making it impossible to be profitable. The ingredients for hamburgers must be imported according to McDonald's regulations and this means importing everything from the buns to the packaging, mostly from Germany. According to the McDonald’s importer, the cost of a bag of McDonald’s approved onions is now higher than a bottle of high-end alcohol. They can’t make any money even if their stores can’t keep up with demand.

And this is the reminder I feel so many in Washington, London and the general public need. Businesses exist to make profit. If they can’t make profit then they shut their doors and go do something else that is profitable. Individuals don’t work for free. Neither do businesses. If your boss said come work for me for free, what would you do? 99.9% of you would leave and do something else. A business is no different, however, the losers are different. The losers are the people. No more McDonald’s fries for people in Iceland.

The first McDonald's restaurant opened in 1993 in Iceland's capital city Reykjavik. The first person who took a bite out of a Big Mac on the island was then-Prime Minister David Oddsson. The importer will replace McDonald’s with Icelandic burgers made from local Icelandic ingredients. The people of Iceland will get their cheap fast food and it will probably be a bit healthier than McDonald’s, but it won’t taste the same. Choice has lost out to the crash in Iceland. Is it possible we could see the same thing happen closer to home? How would you cope if your favorite fast food joint shut down?