McDonald's to quit Iceland as Icelanders cannot afford Big Mac

McDonald's, the world's largest chain of hamburger fast food restaurants, which boasts of a presence in 119 countries around the world, will have one country less in its list of operations as it is pulling out of Iceland since its citizens cannot afford the Big Mac.

McDonald's, which has become a symbol of globalisation, sometimes referred to as the "McDonaldisation" of society, is exiting Iceland and is closing down its three outlets by 31 October due to a fall in the krona and high tariffs on imported goods, making it impossible for ordinary Icelanders to afford the burger if the company is forced to raise prices.

Iceland's three McDonald's restaurants located in the capital Reykjavik and run by franchise holder Lyst ehf said that it was impossible to run the outlets due to falling profits caused by the collapse of the once prosperous Iceland's currency, the krona.

To be profitable, McDonalds would have to raise prices by 20 per cent, which  would put it out of the reach of majority of the island nation's 300,000 people, who are reeling from the near economic bankruptcy of the country. (See: Iceland headed for bankruptcy; PM seeks $5.44-billion Russian loan)

Lyst chief executive officer Magnus Ogmundsson said that raising prices by 20 per cent would have priced the Big Mac at 780 krona ($6.36), compared to the 650 krona ($5.29) that it currently costs. In India a Big Mac cost less than $2.

At $6.36 for a Big Mac in Iceland would have made the McDonalds Icelandic burger the most expensive in its chain, where currently the most expensive Big Macs are sold in Switzerland and Norway for $5.75, and the cheapest are sold in South Africa for $1.68, and China for $1.83.