We sort of assumed that McDonald’s could be profitable almost anywhere — perhaps even the surface of the moon — but apparently Iceland’s economic problems are too much for the world’s largest fast food chain to handle.
Bloomberg is reporting that all of Iceland’s McDonald’s will close at the end of the month due to the collapse of the country’s currency. In order to remain open, the restaurants would have had to start charging the equivalent of $6.36 for a Big Mac. According to the Economist’s Big Mac Index, the world’s most expensive Big Macs are currently located in Switzerland and Norway — where they cost about $5.75.
The island’s currency collapsed last year following the failure of Iceland’s biggest banks. Offshore, the krona slumped as much as 80 percent against the euro, while capital restrictions this year have failed to prevent an 8.1 percent decline, making the krona the second-worst performer of the 26 emerging-market currencies tracked by Bloomberg.
“Our competitors all use domestic meat and lettuce and so on, while we are flying in these materials, which is extremely expensive,” Ogmundsson said.
Iceland is currently relying on “$2.1 billion loan from the International Monetary Fund to stay afloat after its three biggest banks collapsed having racked up debt more than 10 times the size of the economy. ” Whoopsies! Oh well, we suppose they can always go back to eating “slowter,” a traditional Icelandic dish which Marketplace Money informed us is growing in popularity due to its inexpensive ingredients: intestines and blood and fat of sheep.