McDonald's in Russia

Subsidiary of American fast food company
McDonald's in Russia
McDonalds Moscow Pushkinskaya 2013 (14795521387).jpg
McDonald's on Pushkin Square, Moscow (2013)
Native name
Макдоналдс[1]
TypeSubsidiary
IndustryRestaurant
GenreFast food
FoundedJanuary 31, 1990; 32 years ago (1990-01-31) in Moscow, Russia
DefunctDecember 1, 2022; 13 days ago (2022-12-01)[2][3]
FateWithdrawal from Russian market due to 2022 Russian invasion of Ukraine
SuccessorVkusno i tochka (2022–present)
Headquarters26 Valovaya Street,
Moscow
,
Russia
Number of locations
800
Area served
Russia
ServicesMaster franchise
Number of employees
62,000 before dissolution
ParentMcDonald's
Websitemcdonalds.ru (archive)

From 1990 to 2022, the American fast food chain McDonald's operated and franchised McDonald's restaurants in Russia.

After 14 years of planning and negotiations, McDonald's Canada president George Cohon was permitted to open the first McDonald's in the Soviet Union in 1990. The entry of the iconic American brand into the country was seen as a symbol of ongoing economic and political reforms in the then communist state. The company's operations in the country persisted after the dissolution of the Soviet Union the following year, with the decades that followed seeing further expansion in Russia. By 2022, 84% of locations were corporate-owned (through its Russian operating companies McDonald's LLC (Russian: ООО «Макдоналдс») and CJSC Moscow-McDonald's (Russian: ЗАО «Москва-Макдоналдс»)), with the remainder being owned by franchisees.[4]

After over 32 years of presence in Russia, facing mounting criticism for not taking action in the early weeks of the 2022 Russian invasion of Ukraine, the company joined the Western corporate boycott on 8 March, temporarily suspending all operations in the country. In May, the company announced that it would sell all of its restaurants in Russia,[5] which were rebranded as Vkusno i tochka.

History

Background

The 1980 Summer Olympics in Moscow was to be open to Western tourists, but the city had no fast food establishments to serve visitors. The Associated Press reported that "this means meals will be taken in proper Moscow restaurants. Dinner or lunch can take hours and the service and food vary widely."[6] Beginning in 1976, McDonald's of Canada attempted to open two portable restaurants during the Games, near Luzhniki Stadium, the primary venue. Despite criticism of the chain in Soviet magazine The New Times, the plan was nearly finalized with the Moscow Olympic Organizing Committee.[7][6] In autumn 1979 Moscow mayor Vladimir Promyslov vetoed the plan, despite allowing "hundreds" of other Western companies as official suppliers.[6]

Soviet general secretary Mikhail Gorbachev introduced various policies, including perestroika (1985) and glasnost (1986), as attempts to encourage investment from Western countries.

Entry plans

The first Russian McDonald's on Moscow's Pushkin Square, pictured in 1991

McDonald's of Canada president George Cohon aimed to try the market again, and was allowed to lead the project by the parent company.[7]

Plans were made public in November 1987, by Cohon, immediately after signing two preliminary agreements with the city council.[7] While employees would be Soviets, 50 to 75 Russian-Canadian or Russian-British employees would be hired to relocate.[7] Cohon faced skepticism. Some suggested the delay was inconsistent quality amid the Soviet Union's meat shortages.[7]

The first McDonald's in the country would open on Moscow's Pushkin Square on 31 January 1990 with approximately 38,000 customers waiting in hours long lines, breaking company records at the time.[8] By 1997, there were 21 locations of the Russian chain.[9] Cohon visited the country frequently, with eight visits in 1997.[9] The chain hoped to open 30 restaurants in 1998.[9]

2022 Russian invasion of Ukraine

At the beginning of the 2022 Russian invasion of Ukraine, McDonald's had over 800 restaurants across Russia with a total of 62,000 employees, "hundreds" of suppliers, and millions of daily customers.[10][11]

Following pressure on social media, McDonald's announced on 8 March that it was temporarily suspending its operations in Russia while it would continue to pay its employees based in Russia.[10][11] A BBC reporter who attended the closing said that it was "hugely symbolic," as the first store's opening was "when iron curtains were crumbling & Russia was embracing the West."[11] Reuters also said it had "symbolic importance," as "a symbol of flourishing American capitalism as the Soviet Union fell."[12] In Russia, the Ronald McDonald House Charities was originally meant to remain active.[11] After the takeover of the former CFO Oleg Paroev McDonalds Russia's restaurants remained open as of mid March 2022.

On 18 March, it was reported that McDonald's remained unable to close some locations in airports or transit stations.[13]

On 16 May 2022, after temporarily closing its restaurants, the company decided to exit Russia altogether.[14] On 27 May 2022, it was reported that McDonald's was selling its stores in Russia to a local licensee, Alexander Govor. Patent filings showed "Fun and Tasty" and "The Same One" as potential brand names for the firm taking over.[15] Shortly after the announcement, McDonald's branding was removed and a new logo was introduced.[16]

On December 1, 2022, the last 9 McDonald's restaurants at train stations and airports in St. Petersburg and Moscow closed.[17][18]

Replacement

On announcement of closure, Duma state speaker Vyacheslav Volodin was quoted as saying "McDonald's announced that they are closing. Well, good, close down! Tomorrow there won't be McDonald's, but Uncle Vanya's." A trademark was filed under that name, using the Golden Arches on their side with a line.[13] McDonald's has a 15 year option to buy its former restaurants back from Vkusno i tochka.[19]

Alexander Govor [ru] replaced the brand with Vkusno i tochka ("Tasty and that's it"). The restaurants don't offer replacements for the Big Mac[20] or the Happy Meal,[21] but otherwise are intended to be identical.[22][23]

References

  1. ^ "Макдоналдс признан лучшим работодателем в России по версии Top Employers Institute". Макдоналдс в России (in Russian). 9 February 2022. Archived from the original on 2022-03-09.
  2. ^ https://www.m24.ru/news/ehkonomika/28112022/525702
  3. ^ https://ren.tv/news/v-rossii/1050905-ostavshiesia-na-vokzalakh-makdonalds-pereimenuiut-vo-vkusno-i-tochka
  4. ^ Lucas, Amelia (8 March 2022). "McDonald's temporarily closes 850 restaurants in Russia, nearly 2 weeks after Putin's forces invaded Ukraine". CNBC. Englewood Cliffs NJ: CNBC LCC (NBCUniversal). Retrieved 8 March 2022.
  5. ^ Sampath, Uday (16 May 2022). "McDonald's to exit Russia after more than three decades". Reuters.
  6. ^ a b c "Big Macs attacked by mayor". The Globe and Mail. Toronto ON. 3 November 1979. p. S18.
  7. ^ a b c d e Handelman, Stephen (20 November 1987). "'McGlasnost' dawns as Moscow prepares to dine on Big Macs". Toronto Star. Toronto ON. p. A29.
  8. ^ Maynes, Charles (1 February 2020). "McDonald's Marks 30 Years in Russia". Voice of America. Retrieved 16 March 2022.
  9. ^ a b c "McDonald's Cohon wary as market share slips: Charity book details struggle in Russia". The Spectator. Hamilton ON. Canadian Press. 25 October 1997. p. B4.
  10. ^ a b Harris, Sophia (8 March 2022). "McDonald's, Starbucks, Coke, Pepsi join companies suspending business in Russia". CBC News. Toronto ON: Canadian Broadcasting Corporation. Retrieved 8 March 2022.
  11. ^ a b c d "McDonald's, Coca-Cola and Starbucks halt Russian sales". BBC News. London UK: British Broadcasting Corporation. 8 March 2022. Retrieved 8 March 2022.
  12. ^ Russ, Hilary (8 March 2022). "McDonald's, icon of post-Soviet era, to close all restaurants in Russia". National Post. Toronto ON. Reuters. Retrieved 8 March 2022.
  13. ^ a b Harris, Sophia (18 March 2022). "Russia aims to open its own version of McDonald's with similar logo after U.S. chain pulls out". CBC News. Toronto ON: Canadian Broadcasting Corporation. Retrieved 19 March 2022.
  14. ^ Valinsky, Jordan. "McDonald's is leaving Russia altogether". CNN. Retrieved 16 May 2022.
  15. ^ "McDonald's new brand name in Russia could be 'Fun and Tasty'". CNN. Reuters. 27 May 2022. Retrieved 29 May 2022.
  16. ^ Liang, Annabelle (10 June 2022). "Russia's new version of McDonald's unveils logo". BBC News. Retrieved 10 June 2022.
  17. ^ https://www.m24.ru/news/ehkonomika/28112022/525702
  18. ^ https://ren.tv/news/v-rossii/1050905-ostavshiesia-na-vokzalakh-makdonalds-pereimenuiut-vo-vkusno-i-tochka
  19. ^ "Mcdonald's will have a 15-year option to buy its restaurants in Russia back". Reuters. 2 June 2022.
  20. ^ Welle (www.dw.com), Deutsche. "No Big Macs served at 'Vkusno i Tochka' | DW | 14.06.2022" – via www.dw.com.
  21. ^ "Без «Биг Мака». Чем «Вкусно и точка» отличается от McDonald's" (in Russian). Газета.ru. 2022-06-12. Archived from the original on 2022-06-12. Retrieved 2022-06-12.
  22. ^ Rosenberg, Steve (12 June 2022). "Russia unveils 'tasty' McDonald's substitute". BBC News. London UK: British Broadcasting Corporation. Retrieved 14 June 2022.
  23. ^ "McDonald's new name, logo in Russia revealed! Will burgers get expensive? Check here". ZeeNews. 12 June 2022. Retrieved 14 June 2022.

External links

  • Chris Kempczinski, "McDonald's To Temporarily Close Restaurants & Pause Operations in Russia", McDonald's Corporation, March 8, 2022.
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