The Golden Arches to Conquer Siberia

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Aug. 30 – The U.S.-based fast food chain McDonald’s is on the way into one of the largest Big Mac-free territories on the globe. There was confirmation this week that the hunt is on for 10 sites in Novosibirsk, Siberia’s largest city, for McDonald’s outlets.

After serving more than 2 billion fast-food meals and opening more than 300 locations in Russia, McDonald’s is “actively looking into the possibility of opening restaurants not only in Novosibirsk, but in Barnaul, Tomsk and Novokuznetsk,” Viktor Eidemiller, vice president of development for McDonald’s Russia, told Vedomosti.

In addition, the fast-food giant will open its first location in the Central Siberian city of Krasnoyarsk at the end of 2013 or the beginning of 2014, he said.

So far, the furthest east McDonald’s has pushed in Russia is a large outlet in Tyumen City on the western edge of Siberia.

“We had a primary meeting with the governor of Krasnoyarsky Krai and the mayor of Krasnoyarsk. I can say there is a mutual interest, but there is long work which lay ahead,” said Eidemiller. According to company estimates, one restaurant construction may cost from 30 million rubles (less than US$1 million) to 150 million rubles (around US$5 million) depending on the size and format of the outlet.

Eidemiller told Vedomosti that the Siberian locations would get their food items from the logistics center in Kazan, which is midway between Moscow and the Urals. Later, they will receive items through Yekaterinburg, Eidemiller said.

Since it entered the Russian market in January 1990 with its restaurant near Moscow’s Pushkin Square, McDonald’s has ramped up to about 30,000 employees throughout European Russia. It is also expanding its network of domestic suppliers that manufacture foodstuffs that then get delivered to its restaurants.

However, there is a mixed reaction over the expansion of the Big Mac in Novosibirsk.

“I am very unhappy about McDonald’s plans to build restaurants here. I personally believe that it is bad thing for children. It is understandable that they will be the main customers,” Nastya Parkhomeno, 23, editor of ‘Resto’ magazine on where to eat in Novosibirsk, told The Siberian Times.

“Talking about adults – it’s their own choice to eat there or not, but schoolchildren are likely to get addicted to this sort of food, which is not healthy.”

Others think it’s good that McDonald’s will enter Siberia from Novosibirsk, which will benefit the region from an economic point of view through the employment of citizens and competition among other fast-food players on the market.

“Talking about the ‘unhealthy’ side of McDonald’s food, there is a personal choice to eat or not to eat. I hope people won’t protest saying: ‘Americans are killing Russians with their food,’” Irina Vinnik, 24, a postgraduate student of Novosibirsk Institute of Philosophy and Law, said.

Close competitor and fried-chicken chain KFC, which is owned by Yum! Brands, has almost 200 restaurants in Russia, including one location in each of the Siberian cities of Omsk, Krasnoyarsk, Novosibirsk, Nizhnevartovsk and Surgut, according to its website. KFC has had a presence there since 2002.

Another global QSR that operates in Siberia, the sandwich chain Subway, already has 36 locations in Siberia and one in the Far East among its 220 country locations, the company website says.

The U.S. fast food chain’s decision is seen as evidence of economic growth in Siberia and a readiness by regional governments to support the chain.

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