McDonald's in Russia

Certainly, many folks recall the day that McDonald's opened its inaugural franchise in Russia. The launch occurred in the heart of Moscow 15 years ago, not long after the demise of the Soviet Union. It was a major media event, with video cameras recording the line of freezing customers waiting to get into McDonald's. I had to chuckle at reports that the first visitors were dressed in their Saturday night best, more appropriate for a five-star restaurant than a fast food outlet.

Today, more than 70 McDonald's are spread throughout Moscow and the customers no longer dress up for their Big Macs and fries. And McDonald's popularity continues to grow. Why?

According to Lisa Vronskaya of MosNews.com,

Russia’s McDonald’s restaurants have proved to be better than anywhere else.

Maybe, the reason is that the local Mac restaurants get their raw ingredients from local suppliers, or maybe, it is just that today, after 15 years of operating here, McDonald’s remains virtually the only option for a quick and cheap snack.

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Cheap self-service restaurants are scarce, and those that are available are reminiscent of creepy Soviet-era canteens that were crawling with cockroaches -- the smells were enough to ruin your appetite for good.

McDonald's combination of reliable service and quality has proven to be a huge success in Russia even though finger-pointers complain that its food causes obesity. Also, the prices are reasonable. For the equivalent of $1.50, a Big Mac in Russia is as inexpensive or cheaper than anywhere else in the world.

At present, McDonald's is the lone success in Russia of all Western fast food companies and it continues to grow in the number of outlets. The McComplex processing and distribution center has seen a 25 percent increase in production in 2005 and over $30 million has been budgeted for McDonald's franchise expansion in 2006.

Although Starbucks has been trying to wedge itself into Russia for several years, McDonald's already enjoys the upper hand in the coffeehouse market. The McCoffee chain of 15 outlets in Russia has proven to be popular with 12 more openings planned for 2006.

One has to wonder what is keeping Burger King, KFC, Wendy's, Taco Bell, Subway, et al. from gaining a measure of the Russian market. Of course, when one considers the enduring bureaucratic mindset left over from the Soviet regime, coupled with the generally recognized influence of organized crime in Russia, it's easy to believe that many companies are flat reluctant to try.