McDonald's to expand investment in Russia by 40% in 2019

By bne IntelliNews February 6, 2019

US-owned fast food franchise McDonald’s will boost its investment by 40% in 2019 over last year, the company said on February 6.

McDonald’s is already the biggest foreign owned fast food restaurant chain in Russia, having famously launched in 1990 just before the collapse of the Soviet Union.

In the early years, unable to repatriate its profits, the chain simply invested into expanding its network and into real estate or production facilities. The second wave of foreign fast food investments came in during the 2008 crisis with the entry of Burger King, KFC (Yum!) and other franchises. But despite their aggressive expansion McDonald remains well in the lead thanks to a decade’s head start.

“We will be more active in opening 60 new restaurants in 2019 following 40 that were opened in 2018,” Mark Karen, general director of the Russian division of the company said, as cited by Vedomosti.

Karen did not disclose the volume of investments in 2019, but said that the company has invested a total of RUB61bn ($1bn) during its entire time in Russia.

In addition to new investments in 2019, McDonald's also plans to increase staff by 10%, invest in staff training, innovation, raise staff salaries, and increase the number of waiters bringing orders directly to visitors' tables. Some 50,000 people are already working for the network enterprises as of the end of 2018.

“Now we have 98% of Russian suppliers. We plan to bring this figure to 100% over the next two years,” added Karen.

The chain has a total of 680 restaurants in 55 Russian regions today, of which about 100 outlets are franchises, with the rest directly owned by the parent company. Daily visits to the restaurants in Russia is 1.5mn people.

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