The Big Mac era in Russia could be over for years and possibly forever – even if the war in Ukraine ends in the coming weeks or months, experts tell The Post.
McDonald’s, which has opened 850 restaurants in Russia over the past three decades, temporarily closed them all this month because of the war in Ukraine. Now that the Russian government is threatening to reopen them by force, it seems increasingly unlikely that the fast-food giant will rebuild in Russia, experts say.
Just four days after McDonald’s announced its store closures, a trademark application was filed in Russia for a fake burger chain called “Uncle Vanya,” whose red and yellow logo looks like a gold arch on the side.
The request – on which neither the company nor Russian officials have officially commented – followed Russian officials campaigning for the removal of patent protection for companies linked to countries considered anti-Russian.
“Putin and his cronies will not abide by international laws or norms,” said Edward Rensi, a former president and CEO of McDonald’s in the 1990s, when the company opened its first restaurant in Moscow. “I think it’s very likely that McDonald’s won’t reopen – and if it does, it won’t be for 10 or 15 years.”
A key question is when Vladimir Putin’s regime will come to an end — and whether the succeeding regime is actively trying to reestablish diplomatic ties with the US, according to experts.
“The big question for me is how does this end? I don’t think Western companies will be in any rush to reopen in Russia if Russia and Ukraine reach a peace deal,” said Tim Fenton, a former McDonald’s chief operating officer who also oversaw the company’s Middle East business. including Turkey and Greece.
Certainly dozens of companies have already announced plans to leave Russia for good, including PwC, Accenture, Uber and TJMaxx. It also raises questions about how Russia will fight back these efforts, including its threat to seize the assets of foreign companies that have left the country.
“If this situation is resolved,” said restaurant analyst Mark Kalinowski, “I think many industries would seriously consider doing business in a country like this.”
Russians have become big fans of the McD’s brand, as evidenced by the long lines outside restaurants before they closed and demand for the menu items in the secondary market, where Russians were selling Big Macs for the equivalent of $44.
Still, it’s not clear how viable a Russian-run McDonald’s would be, experts say. While most menu items in Russia are made in manufacturing facilities McDonald’s set up many years ago, some ingredients that are no longer available during the sanctions are still imported into the country.
Additionally, without the company’s support, it would be difficult to source the precise products that contribute to the signature flavor of McDonald’s french fries, Big Macs, buns, sauces and other items on the menu.
Russia “would still have to build a supply chain, and I guess they would too [come up with their own] Formula for a Big Mac sauce,” said Jim Lewis, a franchisee who formerly ran McDonald’s locations in the United States.
At the moment, McDonald’s has announced that it will pay its 66,000 Russian employees even when the stores are closed. The fast-food giant owns 84% of its restaurants and has announced that supporting its employees there and other expenses will amount to $50 million per month.
There are still 136 McDonald’s stores in Russia that are not owned by the company but by franchisees. These are the ones that are likely to be among the stores that have not yet closed under McDonald’s decree.
“The reality is that Putin could put McDonald’s workers back to work and order them to run it,” Rensi said, “but will people be willing to do that, and does the government have a list of all the employees?”
McDonald’s declined to comment on this story.
The original McD’s Moscow restaurant, a massive 23,000-square-foot eatery that seats 700, was established by the company’s Canadian subsidiary in 1990 because the Russian government was still angry at President Carter’s decision to ban the 1980 Summer Olympics in Russia boycott, said Rensi, the former CEO.
“There were 27,000 applications for this business and we had people with PhDs applying because Russia’s economy was in a terrible state at the time,” Rensi said.
https://nypost.com/2022/03/18/will-mcdonalds-ever-come-back-to-russia-after-war-with-ukraine-closed-outlets/ Will McDonald’s ever return to Russia after the war with closed branches in Ukraine?