Home Business McDonald’s reopens in Russia with dour name

McDonald’s reopens in Russia with dour name

by Caroline Mattea

McDonald’s restaurants have flung open their doors in Moscow once again under new Russian ownership and a new name: Vkusno & tochka, which translates as “Tasty and that’s it”.

The new dawn for Russia’s fast-food scene will initially see 15 matter-of-factly rebranded restaurants open in and around the capital after the US burger giant turned its back on the country over what Russia calls a “special military operation” in Ukraine.

The reopening of the outlets, three decades after McDonald’s first opened in Moscow in a symbolic thaw between East and West, could provide a test of how successfully Russia’s economy can become more self-sufficient and withstand Western sanctions.

Oleg Paroev, chief executive of Vkusno & tochka, said the company was planning to reopen 200 restaurants in Russia by the end of June and all 850 by the end of the summer.

“Our goal is that our guests do not notice a difference either in quality or ambience,” Paroev told a media conference in what used to be the first McDonald’s restaurant that opened in Soviet Moscow in 1990.

Alexander Govor, the new owner of the chain, said the company employs 51,000 people.

“The corporation asked me to, first of all, keep the headcount, to provide people with work. That’s what I’m going to do,” he added.

The rebranded fast-food chain will keep its old McDonald’s interior but will expunge any references to its old name, said Paroev, who was appointed Russia McDonald’s chief executive weeks before Moscow sent tens of thousands of troops into Ukraine on February 24.

In the early 1990s, as the Soviet Union crumbled, McDonald’s came to embody a thawing of Cold War tensions and was a vehicle for millions of Russians to sample American food and culture. The brand’s exit is now a powerful symbol of how Russia and the West are once again turning their backs on each other.

McDonald’s last month said it was selling its restaurants in Russia to one of its local licensees, Alexander Govor. The deal marked one of the most high-profile business departures since Russia sent tens of thousands of troops into Ukraine on February 24.

Paroev said the company would keep “affordable prices” but did not rule out that they would go up slightly in the near term.

McDonald’s iconic “Golden Arches” will make way for a new logo comprising two fries and a hamburger patty against a green background.

Russian media, citing leaked images of the new menu, have reported the renaming of dishes such as the Filet-O-Fish to “Fish Burger” and Chicken McNuggets to simply “Nuggets”. Reuters could not verify the changes.

Headwinds

Govor has said he plans to expand the new brand to 1000 locations across the country and reopen all the chain’s restaurants within two months. But there may be some headwinds.

It takes decades to build a brand, said Peter Gabrielsson, Professor of International Marketing at Finland’s University of Vaasa, and the new launch is crucial for the brand’s future success.

“Opening day is important because it is the first time consumers can really feel and touch and see the brand and what it stands for,” he said. “It’s important what the reaction will be and obviously people will be comparing it to McDonald’s.”

McDonald’s, the world’s largest burger chain, had owned 84 per cent of its nearly 850 restaurants across Russia and it took a charge of up to $US1.4 billion following the sale to Govor, whose GiD LLC had previously run 25 restaurants.

Oleg Paroev of McDonald’s Russia has said other franchisees would have the option of working under the new brand, but the traditional McDonald’s brand will leave the country. McDonald’s has said it will retain its trademarks.

McDonald’s last year generated about 9 per cent, or $US2 billion, of its revenue from Russia and Ukraine. McDonald’s has the right to buy its Russia restaurants back within 15 years, but many terms of the sale to Govor remain unclear.

The TASS news agency said on Wednesday McDonald’s would stay open as usual at airports and train stations in Moscow and St Petersburg until 2023, quoting a source close to Rosinter Restaurants, another franchisee.

“Rosinter has a unique agreement under which the American corporation cannot take the franchise away. They can operate in peace,” TASS quoted the source as saying.

Rosinter declined to comment. McDonald’s did not immediately respond.

Source : WA Today

Related Articles

Leave a Comment