Heir to McDonald's Russia craves success but Big Mac a 'big loss'

22/6/2022 7:28:00 AM

Highlight: Heir to McDonald's Russia craves success but Big Mac a 'big loss' - Reuters

Highlight: Heir to McDonald's Russia craves success but Big Mac a 'big loss' - Reuters

MOSCOW (June 21): Big Macs and McFlurrys may be off the menu at McDonald's successor restaurants in Russia, but the new firm has ambitious growth targets after it sold almost 120,000 burgers, a record, on its opening day, its chief executive told Reuters.McDonald's Corp has fully exited Russia, selling all the restaurants it owned to a local licensee in May. Under new name Vkusno & tochka, or 'Tasty and that's it,' 50 restaurants in and around Moscow reopened on June 12

A MOSCOW (June 21): Big Macs and McFlurrys may be off the menu at McDonald's successor restaurants in Russia, but the new firm has ambitious growth targets after it sold almost 120,000 burgers, a record, on its opening day, its chief executive told Reuters.06- 21- 2022 04:55 PM Firefighters work to put out a fire at Lysychansk Oil Refinery after if was hit by a missile at Lysychansk, Luhansk region, Ukraine, April 16, 2022.A BRUSSELS (June 21): European Union leaders are set to keep pressure high on Russia at a summit this week when they will underline that work continues on sanctions, according to a draft document, with gold being considered for a possible next round.SINGAPURA: Bekalan minyak mentah yang diimport oleh China dari Russia dilaporkan melonjak 55 peratus berbanding tahun sebelum ini, sekali gus mengetepikan Arab Saudi sebagai pembekal utama.

McDonald's Corp has fully exited Russia, selling all the restaurants it owned to a local licensee in May.Under new name Vkusno & tochka, or"Tasty and that's it," 50 restaurants in and around Moscow reopened on June 12 and June 13.“Fighting in the Severodonetsk industrial zone and catastrophic destruction in Lysychansk,“ the Lugansk regional governor Sergiy Gaiday said in a statement on social media, adding that Lysychansk had suffered from heavy Russian strikes over the previous day.Chief Executive Oleg Paroev is keen to add locations, but acknowledged the challenge of replacing some ingredients and suppliers, as well as dealing with other franchisees still using McDonald's branding.The text is a compromise between Nordic and Eastern countries who pushed for a clear reference to a seventh package in the summit statement, and nations such as Germany and the Netherlands who instead cautioned to focus on applying existing measures rather than immediately add more.The McDonald's exit saga shows both how difficult it is for Western consumer businesses that decided to leave over Moscow's actions in Ukraine to sever all ties to Russia and for local operators to replace popular brands.“We are determining the final number of victims, because yesterday it was almost impossible to move inside the city safely,“ he said.Thousands who came to Vkusno & tochka's flagship opening in Moscow's Pushkin Square were greeted by a new logo, colour scheme and packaging shorn of all McDonald's branding, as the new company lost the right to the U.59 juta tong pada April lalu.

S.Conditions are grim for civilians left in Lysychansk, who have no mobile phone connections, running water or power.Although no new package is currently being prepared, work is ongoing to identify sectors that could be hit, officials said.group's trademarks and intellectual property."On the first day we sold almost 120,000 burgers," Paroev said.Gaiday said that “fierce fighting” was ongoing at the Azot chemical plant in Severodonetsk where hundreds of civilians are believed to be sheltering."We have never seen such daily turnover in the whole time McDonald's has worked in Russia.A person familiar with the work on sanctions told Reuters the European Commission was working on adding gold to a possible next round of sanctions, although it was not yet clear whether the measure could ban export to Russia, imports from Russia or both." While Paroev does not expect such demand to last, he aims to exceed new owner Alexander Govor's growth target and accomplish that ahead of schedule.- AFP.17 juta tong minyak pada April lalu.

Govor's goal is to reach 1,000 stores in four to five years, up from around 850 under McDonald's brand.Hiring is continuing, Paroev said, who also wants to expand cooperation with strategic partner Sberbank, though ruled out a shareholder role for Russia's top lender.MCDONALD'S RETURN? Govor, who previously ran 25 restaurants, said at the launch that he paid a"symbolic" sum for McDonald's Russia and that the U.S.corporation had made it clear they would not exercise a 15-year buyback option.

Paroev, voicing his personal opinion, said McDonald's could return to Russia if Vkusno & tochka became a franchisee again, but stressed there had been no discussions to that effect.In an emailed statement, McDonald's said it has"finalised the sale of its Russian business and exited the market." FRANCHISE CONUNDRUM Some former McDonald's franchisees have kept its branding on packaging and electronic menus and are selling Big Macs under a different name, creating a headache for Vkusno & tochka."Of course we're not happy about this," Paroev said.While continued use of the McDonald's brand is a violation of Russian law, the company cannot take legal action because it has no rights to the brand, he said.

Rosinter Restaurants, an ex-franchisee still operating in train stations and St Petersburg's Pulkovo airport, did not respond to a request for comment.Vkusno & tochka has proposed ex-franchisees join the new brand, Paroev said, with one having already agreed.Govor bought around 700 restaurants, Paroev said, leaving about 100 unaccounted for and while Vkusno & tochka still has access to old suppliers, other ex-franchisees do not.People visit the new restaurant"Vkusno & tochka", which opens following McDonald's Corp company's exit from the Russian "It's a mystery to me what products are sold there," he said of restaurants in train stations and airports, speaking on Friday."But I can say with certainty that it is absolutely not the same products or ingredients that were previously sold at McDonald's.

" SUPPLIER HEADACHE Vkusno & tochka is determined to maintain product quality, Paroev said, but keeping a familiar taste is a challenge.Even though 99% of products come from Russian suppliers, Paroev said"a significant percentage" of ingredients is sourced abroad, a process complicated by sanctions and supply chain disruptions.Vkusno & tochka is looking for a new drinks provider, as Coca Cola is depleting its Russia stock, Paroev said.The coffee blend will stay, he said, supplied now by an Indian investor who bought the Russian operations of Finland's Paulig.As agreed with McDonald's, recipes will change and a Big Mac replacement is in the works, Paroev said.

"This is quite a big loss," he said."The fact it has now gone from the menu does not help us." Establishing the new brand will take time, but Paroev was optimistic."Our guests will get used to the new name and understand that they are no longer at a 'Mac', but at a 'tochka'." Subscribe to Mid-day email alert We deliver news to your inbox daily.

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