US fast food chains banking on Russian bellies

The Kremlin has moved aggressively in recent months to stifle US influence on its domestic politics, but America’s fast-food footprint continues to grow across Russia’s nine time zones, RIA reports.

Iconic US eatery McDonald’s has announced it could widen its presence from Russia’s western exclave of Kaliningrad to eastern Siberia in a race to satisfy what industry experts describe as a growing Russian appetite for American fast food—politics be damned.

McDonald’s, which currently operates 357 restaurants in 85 Russian cities, plans to open at least 150 new restaurants in Russia over the next three years as well as possible franchised restaurants in Kaliningrad and Siberia, Khamzat Khasbulatov, head of the company’s Russian operations, told a news conference last week.

The fast-food market in both of these regions is currently dominated by the US sandwich chain Subway and KFC, whose parent company, Yum Brands, announced earlier this month that it planned to open between 60 and 70 new restaurants in Russia and other former Soviet countries.

Yum Brands said it plans to nearly double the number of its restaurants in the region to around 400 by 2015, with the goal of pushing annual revenue to $1 billion.

Subway and the hamburger chain Burger King have also announced plans in recent years to seize a greater share of Russia’s fast-food market, which Euromonitor International estimates at $8.7 billion, the Russian business daily Vedomosti reported last week.

McDonald’s, which came to Russia in January 1990—two years before the collapse of the Soviet Union—had 43.3 percent of the Russian market in 2011, followed by KFC at 6.1 percent, Subway at 4.1 percent and Burger King at 3.3 percent, according to Euromonitor International data cited by Vedomosti.

Many US chains have infused Russian culture and customs into their menus to attract consumers across different generations, Joseph Cappa, an expert on the global fast-food industry at Colorado Technical University, told RIA Novosti.
“Local flavor is another aspect of the appeal,” he said.