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Business

Farewell Golden Arches: McDonald’s rebranded to reopen in Russia




  • McDonald’s has been hugely popular in Russia since the early 1990s
  • It is among Western companies leaving Russia over Ukraine
  • The company had operated almost 850 restaurants throughout Russia
  • McDonald’s restaurants reopen on Sunday under new ownership

June 10 (Reuters) – Sunday marks a new dawn for Russia’s fast food lovers as former McDonald’s Corp (MCD.N) restaurants reopen under new branding and ownership, more than three decades after the arrival of the hugely popular Western fast food chain.

The relaunch will begin on Russia Day, a patriotic holiday to celebrate the country’s independence, at the same flagpole on Moscow’s Pushkin Square, where McDonald’s opened in Russia in January 1990.

In the early 1990s, as the Soviet Union crumbled, McDonald’s embodied a thaw in the Cold War tensions and was a tool for millions of Russians to taste American food and culture. The exit of the brand is now a powerful symbol of how Russia and the West once again turn their backs on each other.

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

McDonald’s iconic “Golden Arches” have been taken down in places in Moscow and St. Petersburg, where they will make room for a new logo consisting of two french fries and a hamburger nipple against a green background. The reopening will initially cover 15 locations in Moscow and the surrounding region.

The name of the new chain remains a closely guarded secret. A change in the name of the McDonald’s app on Friday to ‘My Burger’ created some excitement online, but the chain’s press team said that this was only temporary, RBC reported.

A motto on the app’s website read: “Some things are changing, but stable work has come to stay”.

Russian media, citing leaked photos of the new menu, have reported names of dishes such as Filet-O-Fish for “Fish Burger” and Chicken McNuggets for simply “Nuggets”. Reuters could not confirm the changes.

COUNTERWIND

Govor has said it plans to expand the new brand to 1,000 locations across the country and reopen all of 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 the University of Finland in Vaasa, and the new launch is crucial to the brand’s future success.

“The opening day is important because it’s 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 compare it to McDonald’s.”

McDonald’s, the world’s largest burger chain, had owned 84% of its nearly 850 restaurants across Russia and took a cost of up to $ 1.4 billion after the sale to Govor, if GiD LLC had previously operated 25 restaurants.

Oleg Paroev from McDonald’s Russia has said that other franchisees will have the opportunity to work under the new brand, but the traditional McDonald’s brand will leave the country. McDonald’s has said it will keep its trademarks.

Last year, McDonald’s generated about 9%, or $ 2 billion, of revenue from Russia and Ukraine. McDonald’s has the right to buy back the Russian restaurants within 15 years, but many terms for the sale to Govor are still unclear.

The news agency TASS said on Wednesday that McDonald’s will remain open as usual at airports and train stations in Moscow and St. Petersburg until 2023, cites a source close to Rosinter Restaurants (ROST.MM), another franchisee.

“Rosinter has a unique agreement that the American company can not take away from the franchise. They can operate in peace,” the TASS source quoted.

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

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Reporting by Reuters Editing by Matt Scuffham and Gareth Jones

Our standards: Thomson Reuters Trust Principles.



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