On Sunday, the restaurant that launched the iconic brand in 1990 in Russia – the first American fast food restaurant to open in the Soviet Union and a powerful symbol of the easing of Cold War tensions – reopened under a brand new name and logo
Russia’s foodies are no longer ‘loving it’.
McDonald’s specifically.
On Sunday, the restaurant that launched the iconic brand in 1990 in Russia – the first American fast food restaurant to open in the Soviet Union and a powerful symbol of the easing of Cold War tensions – reopened under a brand new name and logo.
Let’s take a closer look at what happened and why:
Why did McDonalds exit Russia?
The Ukraine war.
In May, the US fast-food giant, becoming the latest corporation to exit Russia in the wake of Moscow’s Ukraine offensive, pointed to the humanitarian crisis saying holding on to its business in Russia “is no longer tenable, nor is it consistent with McDonald’s values.”
The Chicago-based company announced in early March that it was temporarily closing its stores in Russia but would continue to pay employees.
CEO Chris Kempczinski said the “dedication and loyalty to McDonald’s” of employees and hundreds of Russian suppliers made it a difficult decision to leave.
“However, we have a commitment to our global community and must remain steadfast in our values,” Kempczinski said in a statement, “and our commitment to our values means that we can no longer keep the arches shining there.”
McDonald’s decision to leave comes as other American food and beverage giants including Coca-Cola, Pepsi and Starbucks have paused or closed operations in Russia in the face of Western sanctions.
Corporations from British energy giants Shell and BP to French carmaker Renault have pulled out of Russia, taking a hit to their bottom lines as they seek to sell their holdings there. Other companies have stayed at least partially, with some facing blowback.
McDonald’s Russian restaurants had accounted for around nine percent of the US group’s turnover.
Grand opening
In Moscow’s Pushkin Square on Sunday, dozens of people gathered outside the Russian incarnation of the fast-food restaurant, “Vkusno i tochka” (Translated to Tasty and that’s it), well before the official noon opening.
The rebranding coincided with Russia Day, a holiday marking the country’s independence, as per CNN.
“My whole family went… three times to McDonald’s for a farewell meal,” Elena, a programmer and mother of two, told AFP.
“Now we’re going for a reunion lunch,” she smiled.
Inside, 31-year-old Oleg, one of the first customers to receive his order, said “Vkusno i tochka” was “delicious, beautiful and cheap.”
On Sunday, that earlier symbolism echoed through Sunday’s reopening with a note of nostalgia.
“This is a historic place — the flagship of McDonald’s,” Govor told reporters. “I’m sure it will be the flagship for us.”
Inside, the restaurant resembled a fraternal twin of its former self. There were touchscreens for placing orders and counter workers wearing familiar polo-shirt uniforms.
An employee stands in front of the menu board of the Russian version of a former McDonald’s restaurant before the opening ceremony, in Moscow on 12 June. AFP
“We’re sure that our customers won’t notice a difference between us,” Paroev said. However, he said, the company will seek a new soft drinks supplier as it has limited stocks of Coca-Cola.
The restaurant, on the spot where the very first McDonald’s opened its doors to long queues and great fanfare in January 1990, is among the first 15 to welcome customers.
On Monday, another 50 restaurants are set to open, according to Oleg Paroyev, general manager of the new group, with the chain then planning to reopen 50 to 100 a week across the country.
What’s new?
In place of the Golden Arches, there’s a new logo – two stylised orange fries alongside a red dot on a green background.
The logo is different, but still evokes the golden arches: a circle and two yellow oblongs — representing a beef patty and french fries — configured into a stylized M.
There are still double cheeseburgers on the menu, as well as a wide range of ice creams and desserts. But the “Mc” prefix no longer appears.
“We had to remove some products from the menu because they refer directly to McDonald’s, such as the McFlurry and Big Mac,” Paroyev said.
Prices have risen “slightly” due to the inflation that has hit Russia hard after Western countries imposed sanctions — but they remain “reasonable”, he added.
As for the packaging, it is “neutral” — “no word, no letter” should remind customers of the McDonald’s group, Paroyev said.
The crowd at the Pushkin Square outlet, however sizable and lively, was no match for the turnout for the McDonald’s opening in 1990, when people waited in line for hours.
On the first day, 30,000 people were served, a McDonald’s record for an opening day, the CBC reported at the time. The location even had to stay open for hours later than planned because of the crowds.
About 630 employees were chosen out of 27,000 plicants, according to a 1990 Washington Post article.
At that time, McDonald’s had psychological and political resonance beyond hamburgers.
The opening was the first taste most Muscovites had of Western consumerism and service efficiency, as well as a sign the Soviet Union was slowly dropping its guard and allowing foreign culture into the country.
“If the opening of McDonald’s in 1990 symbolized the beginning of a new era in Soviet life, one with greater freedoms, then the company’s current exit represents not just a closing down of business, but of society as a whole,” Darra Goldstein, Willcox B. and Harriet M. Adsit professor of Russian, emerita, at Williams College, told CNN.
This photograph taken on on 12 June shows a double cheeseburger menu’ including fries, sauce and a soft drink in the Russian version of a former McDonald’s restaurant during the opening ceremony in Moscow Kirill KUDRYAVTSEV / AFP
Three days after the company announced its exit in May, Russian businessman Alexander Govor, who had been a licensee of the chain, bought the 850-restaurant operation.
“I am ambitious and I don’t only plan to open the 850 restaurants but to develop new ones,” Govor said on Sunday.
Under the sale conditions, Govor agreed to retain employees for at least two years and fund liabilities to suppliers, landlords and utilities, McDonald’s said.
The price of the transaction was not disclosed but in announcing its exit, McDonald’s said it planned to take a one-time charge of $1.2 billion to $1.4 billion to write off the investment.
McDonald’s had employed 62,000 workers in Russia.
Govor, a licensee since 2015, has operated 25 restaurants in Siberia. He is co-founder of NefteKhimService, a refining company, and a board member of a firm that owns the Park Inn hotel and private clinics in Siberia.
McDonald’s said exiting Russia will not change its forecast of adding a net 1,300 restaurants this year, which will contribute about 1.5% to companywide sales growth.
Last month, McDonald’s reported that it earned $1.1 billion in the first quarter, down from more than $1.5 billion a year earlier. Revenue was nearly $5.7 billion.’
With inputs from agencies
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