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 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.

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 the 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.

http://news.yahoo.com/s/ap/20091026/ap_on_bi_ge/eu_iceland_mcdonald_s;_ylt=

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Wow when MC Donalds leaves an Area it must be seriouly ****ed up economically ...

Leaving Iceland completely ? Come on there is one of those lousy stores in any slum ?! Is it that bad ?

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A German Soldier doesnt die, he goes to hell and regroups !

I know this has nothing to do with the subject of McDonalds in Iceland but i'm gonna digress a bit.

If somebody born in Iceland wants to serve in the military where do they go ?.

I remember reading that one of the Scandinavian countries allows Icelanders to serve in their armed forces but i can't remember which one.

Can anybody clarify for me ?.

Some Icelanders lost jobs, same time they won't be eating that poor quality crap anymore

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i think its denmark.

Iceland has historic ties with Denmark and Norway (the Danish kings ruled Norway and Iceland for a period, so I also believe it's Denmark.) The Icelandic language is also closely related with Danish.

Kingdom of Denmark-Norway (1536-1814)

http://en.wikipedia.org/wiki/Denmark%E2%80%93Norway

Grateful for the help lads, thanks.

"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."

All they need to do is to bow down before the mighty German Burger Conglomerate And you thought we only control the international Bratwurst market

Maybe cheese and meat will flow to Iceland again soon since they are forced under our rule anyway now ... when they join the European Union they wont have such high import barriers anymore and the Euro will ensure profit again

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A German Soldier doesnt die, he goes to hell and regroups !

Thousands line up for last Big Mac in Iceland

Thousands of Icelanders lined up at McDonald's restaurants to order their last Big Macs before the U.S. fast-food chain abandons the crisis-hit island at midnight Saturday due to soaring costs.

The world's largest fast-food company said earlier this week that all three of its restaurants in Iceland, operated by franchisee Jon Ogmundsson, would shut down October 31.

The outlets have been packed since the announcement, with lines at one restaurant on the east side of the city backing up out the door and onto the street.

At lunchtime Friday the outlet's parking lot was full and staff inside were working furiously to keep up with the soaring demand.

"It's my last chance for a while to have a real Big Mac," Siggi, a 28-year old salesman waiting in line, told Reuters.

"With the economy as it is, I won't be traveling abroad any time soon," he added. "It's not that I'm a big fan of McDonald's, but a Big Mac now and then adds to variety."

Ogmundsson, who will continue running the restaurants under a different name after taking down the golden arches, said he had even run out of Big Macs for a few hours Thursday.

"Sales have not just gone up," Ogmundsson was quoted saying in the local media. "It's gone turbo."

Ogmundsson said he managed to catch up with the surge in demand and had been selling about 10,000 burgers a day -- more than ever before.

Iceland has been reeling from the effects of the financial crisis since October 2008, when its banks collapsed in the space of a week under the weight of billions of dollars in debt.

The fall of the banks sapped confidence in Iceland's economy and sent its currency, the crown, into freefall. McDonald's said the crown's weakness was part of the reason for its withdrawal, along with the high cost of importing food from abroad.

McDonald's said it would not seek to come back to Iceland.

In a nearby stationary store, Thora Sigurdardottir, a 35-year old nursing assistant, said she had no intention of going for a final McDonald's meal.

"Good riddance," she said.

http://news.yahoo.com/s/nm/20091030/lf_nm_life/us_iceland_mcdonalds

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jason

its norway they have an agrement with

there was a picture posted on arrse some time ago with showing an icelander (correct term?) in Noggy uniform with an Icelandic flag patch





The history of English speaking peoples

Time for an enterprising young Soviet chap to open up a Kroshka-Kartoshka in Iceland, its the Russian McDonalds. If your country cant afford the Golden Arches, we can send you the Sickle and Hammer. Baked potatoes for all!

WTF, no McDo in Iceland?

How will the leftist hooligans express their anger then?



When I was young I used to pray for a bike, then I realized that God doesn't work that way, so I stole a bike and prayed for forgiveness.

In a nearby stationary store, Thora Sigurdardottir, a 35-year old nursing assistant, said she had no intention of going for a final McDonald's meal.

"Good riddance," she said.

This is bad news indeed,before you know it a kebab shop will open in its place

and you know what that means!

"This is bad news indeed,before you know it a kebab shop will open in its place
and you know what that means!"

Good food?


I Hail The Flag

I said "bad news indeed"

kebabs are hardly healthy,but thats not the point,we know what it means when you see kebab stalls in your

neighbourhood,it means sell your property and move on"invasion imminent"