McDonald’s to close all Iceland locations

New York City McDonald’s said late Monday it will close its Iceland restaurants after the collapse of the krona eroded profits at the fast-food chain, according to a report by Bloomberg.

McDonald’s franchise holder Lyst ehf said McDonald’s in Iceland, which imports most of the ingredients it uses in its meals, will shut as costs doubled over the past year.

The franchise holder said it doesn’t expect the situation to change in the short term.

“We would have to raise our prices by 20% to get the margin needed on our products,” Magnus Ogmundsson, Lyst CEO, told Bloomberg. “That would have sent a Big Mac to 780 kronur” ($6.36), compared with the 650 kronur it costs today, he said.

The island’s currency collapsed last year following the failure of Iceland’s biggest banks. Offshore, the krona slumped as much as 80% against the euro, while capital restrictions this year have failed to prevent an 8.1% decline.

McDonald’s opened its first store in Iceland in 1993. The island has three McDonald’s restaurants, all of which will be closed.