McDonald's in Russia

After fourteen years of planning and negotiation, McDonald's of Canada president George Cohon was permitted to open the first McDonald's in Russia in Moscow, Russian SFSR, in 1990. The entry of the iconic American brand into the Soviet Union was seen as a symbol of ongoing economic and political reforms in the communist state. The company’s operations in the country persisted through 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, with the remainder being franchisees.[2]

McDonald's in Russia
Native name
Макдоналдс в России[1]
TypeSubsidiary
IndustryRestaurant
GenreFast food
FoundedMoscow (1990)
Headquarters26 Valovaya Street,
Moscow
,
Russia
Number of locations
800
Area served
Russia
ServicesMaster franchise
Number of employees
62,000 As of March 2022
ParentMcDonald's
Websitemcdonalds.ru

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 widespread Western corporate boycotts on March 8, temporarily suspending all operations in the country.

Background

The Soviet Union was formed in 1922, after the Bolsheviks overthrew the Russian Provisional Government.

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."[3] 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.[4][3] In autumn 1979 Moscow mayor Vladimir Promyslov vetoed the plan, despite allowing "hundreds" of other Western companies as official suppliers.[3]

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 in 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.[4]

Plans were made public in November 1987, by Cohon, immediately after signing two preliminary agreements with the city council.[4] While employees would be Soviets, 50 to 75 Russian-Canadian or Russian-British employees would be hired to relocate.[4] Cohon faced skepticism. Some suggested the delay was inconsistent quality amid the Soviet Union's meat shortages.[4]

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.[5] By 1997, there were 21 locations of the Russian chain.[6] Cohon visited the country frequently, with eight visits in 1997.[6] The chain hoped to open 30 restaurants in 1998.[6]

Russian invasion of Ukraine


As of the beginning of the Russian attacks on Ukraine, the aggressor country was host to more than 800 McDonalds restaurants with 62,000 employees, "hundreds" of suppliers, and millions of daily customers.[7][8] Ukraine had 108 locations of the restaurant.[8]

Early in the attack, McDonalds closed all 108 locations in Ukraine, and committed to paying salaries in the country.[8]

Facing continued pressure on social media, McDonalds announced on March 8 the temporary suspension of operation of its restaurants in Russia. It announced that it would continue to pay the employees in that country.[7][8] A BBC reporter who attended the closing was "hugely symbolic," as the first store's opening was "when iron curtains were crumbling & Russia was embracing the West."[8] Reuters also said it had "symbolic importance," as "a symbol of flourishing American capitalism as the Soviet Union fell."[9] After the takeover of the former CFO Oleg Paroev McDonalds Russia's restaurants still are open in mid March 2022.

In both countries, Ronald McDonald House Charities are to remain active.[8]

As of March 18, McDonald's remained unable to close some locations in airports or transit stations.[10]

Uncle Vanya's

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.[10]

References
  1. "Макдоналдс признан лучшим работодателем в России по версии Top Employers Institute", Макдоналдс в России, 9 February 2022.
  2. 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.
  3. "Big Macs attacked by mayor". The Globe and Mail. Toronto ON. 3 November 1979. p. S18.
  4. Handelman, Stephen (20 November 1987). "'McGlasnost' dawns as Moscow prepares to dine on Big Macs". Toronto Star. Toronto ON. p. A29.
  5. Maynes, Charles (1 February 2020). "McDonald's Marks 30 Years in Russia". Voice of America. Retrieved 16 March 2022.
  6. "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.
  7. 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.
  8. "McDonald's, Coca-Cola and Starbucks halt Russian sales". BBC News. London UK: British Broadcasting Corporation. 8 March 2022. Retrieved 8 March 2022.
  9. 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.
  10. 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.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.