In early March, McDonald’s announced its decision to temporarily close 850 Russian restaurants. The reason for this step was the conduct of a special military operation by Russia in Ukraine. However, according to experts, the closure of the chain’s restaurants may give Russian companies a chance to grow. Who will replace McDonald’s in Russia, read in the RIAMO material.
On March 8, McDonald’s announced its decision to temporarily close 850 restaurants operating in Russia. The restaurants closed indefinitely on March 14 and delivery through popular apps also stopped. At the same time, according to the decision of the McDonald’s management, approximately 62,000 employees of the company will continue to receive salaries.
McDonald’s will continue to pay rent for the facility during the suspension of operations in Russia. At the same time, a TASS source in the company said on March 11 that the American fast food chain could return to the Russian market in 45 days. “According to experts, resolving such problems that have arisen before the company can take about a month and a half,” he said.
However, all McDonald’s restaurants operating on a franchise basis continued to operate in Moscow. We are talking about institutions at the airports of the capital and at the Leningradsky railway station. In addition, MacExpress windows continue to operate near some Moscow metro stations.
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Dmitry Medvedev, Vice President of the Security Council of the Russian Federation, said on March 10 that Russia would be able to cope with the withdrawal of McDonald’s and other foreign companies from the market. Medvedev noted that foreign companies decided to suspend or restrict their activities in Russia not because of business interests, but because of politics.
“We produce cutlets and rolls, of excellent quality, and we know how to make them. This, incidentally, could be done by sanctioned entrepreneurs. Hello McDonald’s! Medvedev stressed.
The same day, Moscow Mayor Sergei Sobyanin wrote in his blog that one of the measures to replace the imports of foreign companies and industries into Moscow would be to support projects to create domestic fast food chains.
“We will allocate 500 million rubles on favorable terms to projects for the creation of domestic fast food chains – this measure is designed to cover the position vacated by foreign chains,” Sobyanin said.
The reaction of the industry did not take long to come. Thus, the restaurant of the capital Alexei Vasilchuk, owner of the farm Restart Vasilchuk Brothers (the food shopping center Depo Moscow and Chaikhona No. 1), said that by the end of this year he intends to open dozens of restaurants with the brand Restomarket in the metropolis. Vasilchuk applied for a grant from the mayor of Moscow. His example was followed by rapper and businessman Timati, who plans to open a new craft fast food network in the capital.
“I applied for a grant from the Moscow government because, in my humble opinion, I have the best specialization in fast food in the country. “I plan to score about five points in a year,” said the musician.
The restaurant and founder of Pinskiy & Co. Anton Pinsky also applied for a grant to open a catering chain in Moscow. According to him, the farm increased its turnover and grew actively. Also in the future, the Moscow government program for the development of domestic fast food chains will assist in this activity.
“I do not think we need a McDonald’s analogue, but a facility with healthy and wholesome food. We planned to open about 20 projects throughout Russia, more than half of which were in Moscow. And with that in mind, if we get it, we plan to open five or seven more restaurants. “The people of Moscow will not be left without food,” Pinsky said.
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“It is not a tragedy, but an opportunity for competitors”
In an interview with RIAMO in recent years, McDonald’s pricing policy in Russia is far removed from the image of relatively cheap fast food, says Mikhail Khachaturyan, Associate Professor in the Department of Management and Innovation at the Russian government’s University of Economics.
“The hamburgers sold by the American company are almost equal in price to those sold in FARSH restaurants, Black Star or other participants in this area of the restaurant. “Therefore, the departure of McDonald’s is obviously not a tragedy, but an opportunity for competitors to offer something new and original,” explains Khachaturyan.
Alexander Muratov, development director of the Yakitoria-owned company, agrees that exiting the Russian market for large foreign fast-food chains, including McDonald’s, opens up wide-ranging prospects for Russian players. Opening fast food restaurants in the current financial situation is the least risky investment, as shops of this type traditionally suffer less during a crisis. As Muratov notes, this was confirmed once again during the COVID-19 pandemic: for example, in 2021, the number of visitors to the fast food section decreased by only 1% compared to 11% in the general catering market.
“At the same time, it should be borne in mind that the start of a new project will take from 9 to 12 months even for the most experienced player in the catering industry. “And now entrepreneurs may have difficulty buying equipment – in the fast food restaurant segment, there is a fairly high share of imports,” he said.
In addition, according to Muratov, a feature of fast food is the low cost of dishes, so pricing can be the main difficulty when starting restaurants. After all, it is also important to keep the quality of food and services at the usual level for guests – and this is not easy in the context of rising food prices and breaks in supplies.
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According to Mikhail Khachaturyan, while the Moscow government announced grants to implement ideas to replace McDonald’s, food trucks have already appeared near some restaurants in the downtown chain, implementing the idea of cooking and selling burgers with unusual names – like mom’s love “.
“If we talk about the concepts of possible installations, then first of all, burgers known to the Russians will be opened, which can become analogous to the same McDonald’s. “Some Russian celebrities with experience in the restaurant industry have already started talking about such plans,” says Alexander Muratov.
According to the expert, the position vacated after the departure of foreign players will certainly be occupied by national cuisine restaurants, including Russian, Asian and European. Already, many restaurants are discussing the possibility of opening a variety of basket, seburek and wine glasses. In addition, foreign players, for example, from Turkey, can also enter the Russian market.
“In any case, the restaurant market in Russia is now undergoing another transformation and in the near future we can see many new interesting projects, as well as non-standard solutions from already operating restaurant brands that will adapt to current market conditions.” concludes the RIAMO interlocutor.
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However, not all experts are so optimistic. Thus, according to Georgy Tashker, Associate Professor in the Department of Business Administration at Synergy University, a restaurant and general manager of Tsurtsum, Brokar and Chest cafes, no one can replace the restaurants of the American fast food chain. . As the expert explains, this network has been developing in the country for 30 years: it has adapted to the Russian mentality, national characteristics and economy.
“If McDonald’s really leaves the fast food market, it’s unlikely anyone can replace it quickly. “However, the network has more than 800 grocery stores located in various parts of cities, regions, highways,” says the RIAMO interlocutor.
According to Tashker, first of all, huge investments will be needed to replace McDonald’s. But even if such an amount of funds is found, there will be difficulties with facilities that would be suitable for this type of activity.
“The technologies with which fast food is prepared, of course, are available for every brand. Employees can also be found and trained. “But to win love and recognition, as McDonald’s did, will take a long time.”
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