Iceland's two McDonald's restaurants will close on November 1 due to rising costs brought on by the country's economic collapse, the Icelandic operator of the US fast-food chain said on Monday.
"The decision was not taken lightly," Jon Gardar Ogmundsson, the owner of Lyst which runs the restaurants, told AFP.
"The reason for this decision is the difficult economy and the collapse of the Icelandic krona. This is a decision we made in deliberation with McDonald's," he added.
McDonald's requires all resources for its restaurants, including packaging, meat, vegetables and cheese, to be imported, as the Icelandic market is too small to produce the required products.
Ogmundsson said the restaurants import their goods from Germany, but costs had doubled because the falling krona has made imports prohibitively expensive. Since March 2008, the euro has become almost 80 percent more costly for the krona.
The two McDonald's restaurants have "never been this busy before," Ogmundsson said, "but at the same time profits have never been lower."
Ogmundsson plans to run the restaurants under another name in order to be able to buy cheaper Icelandic products.
Asked whether he intended to reopen McDonald's restaurants when the economy gets better, Ogmundsson said it was unlikely.
Iceland's first McDonald's opened in 1993, with the then prime minister, David Oddsson, eating the first burger.
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