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McDonald's in Russia

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McDonald's in Russia
Native name
Макдоналдс[1]
Company typeSubsidiary
IndustryRestaurant
GenreFast food
Founded31 January 1990; 34 years ago (1990-01-31) in Moscow, Russian SFSR, Soviet Union
Defunct1 December 2022; 2 years ago (2022-12-01)[2][3]
FateWithdrawal from the Russian market due to the Russian invasion of Ukraine
SuccessorVkusno i tochka (2022–present)
Headquarters26 Valovaya Street,
Moscow
,
Russia
Number of locations
850
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 Russia by the Soviet government 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 Soviet Union. The company's operations in the country further developed after the collapse of the USSR the following year, with the decades that followed seeing massive 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]

Due to the Russian invasion of Ukraine, McDonald's temporarily suspended all operations in the country on 8 March. In May, the company announced that it would sell all of its restaurants in Russia,[5] which were rebranded as Vkusno i tochka.

History

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Background

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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

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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]

McDonald's Pushkin Square after its 2010 renovations and before its 2020 renovations

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 caused by inconsistent quality amid the Soviet Union's meat shortages.[7]

Interior of McDonald's Pushkin Square, pictured in 2013

The first McDonald's in the country had a grand opening 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]

Interior of McDonald's Pushkin Square re-designed by Landini Associates to celebrate 30 years of McDonald's in Russia, pictured in 2020

In January 2020, to celebrate the 30th anniversary of its opening, the first Russian McDonald's on Moscow's Pushkin Square (which had previously been renovated in 2010) was redesigned by Landini Associates.[10] Due to the COVID-19 pandemic, the exterior renovation was not completed until 2021.[11]

Russian invasion of Ukraine

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At the beginning of the 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.[12][13]

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.[12][13] A BBC reporter, who attended the closing of the first McDonald's in Moscow, stated that the mood was solemn, with people flocking to witness the event, and it was also "hugely symbolic," as the first store's opening was "when iron curtains were crumbling & Russia was embracing the West."[13] Reuters also emphasized it had symbolic importance as a symbol of prospering American capitalism amid the collapse of the Soviet system.[14] In Russia, the Ronald McDonald House Charities was originally meant to remain active.[13] 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.[15]

On 16 May 2022, after temporarily closing its restaurants, the company decided to exit Russia altogether.[16] 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.[17] Shortly after the announcement, McDonald's branding was removed and a new logo was introduced.[18]

Shutdown, replacement and aftermath

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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.[15] McDonald's has a 15-year option to buy its former restaurants back from the new Russian chain.[19]

Alexander Govor replaced the brand with Vkusno i tochka ("Simply Delicious"). The restaurants offer replacements for all menu items, but most are rebranded.

In November 2022, McDonald's announced that due to "extensive local supply issues" its licensee in neighbouring Belarus would stop operating under its name, and the restaurants were rebranded as Vkusno i tochka.[20]

On 1 December 2022, the last 9 Russian McDonald's restaurants at train stations and airports in St. Petersburg and Moscow closed.[2][3]

In January 2023, McDonald's closed its restaurants in Kazakhstan, believed to be due to supply issues, with its restaurants expected to be rebranded.[21]

References

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  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 9 March 2022.
  2. ^ a b "Бывшие McDonald's на вокзалах и аэропортах РФ перейдут под бренд "Вкусно – и точка"".
  3. ^ a b "McDonald's в аэропортах и на вокзалах станут "Вкусно - и точка"". 28 November 2022.
  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. ^ "MCDONALD'S "NON-DESIGN" - MOSCOW RETAIL TOUR". Retrieved 25 June 2023.
  11. ^ "Moscow's first McDonald's restaurant transformed into an island of calm". Hype&Hyper. 15 May 2020. Retrieved 25 June 2023.
  12. ^ 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.
  13. ^ 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.
  14. ^ 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.
  15. ^ 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.
  16. ^ Valinsky, Jordan (16 May 2022). "McDonald's is leaving Russia altogether". CNN. Retrieved 16 May 2022.
  17. ^ "McDonald's new brand name in Russia could be 'Fun and Tasty'". CNN. Reuters. 27 May 2022. Retrieved 29 May 2022.
  18. ^ Liang, Annabelle (10 June 2022). "Russia's new version of McDonald's unveils logo". BBC News. Retrieved 10 June 2022.
  19. ^ "Mcdonald's will have a 15-year option to buy its restaurants in Russia back". Reuters. 2 June 2022.
  20. ^ ""Tasty and that's it": McDonald's to be rebranded in Belarus". Reuters. 11 November 2022.
  21. ^ "McDonald's leaves Kazakhstan over supply shortages". BBC News. 6 January 2023.
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External videos
on Vkusno - i tochka Official YouTube Channel(in Russian)
video icon Live food with Sergei Malozyomov. Product safety at “Vkusno - i tochka”. on YouTube
video icon Live food with Sergei Malozyomov. Baked goods and desserts at “Vkusno - i tochka”. on YouTube
video icon "Our Consumer Supervision". Sanitary standards at “Vkusno - i tochka”. on YouTube
video icon "Our Consumer Supervision". Product logistics for “Vkusno - i tochka”. on YouTube
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