The city authorities will allocate 500 million rubles. to create a fast food chain instead of McDonald’s. According to Mayor Sergei Sobyanin, domestic burgers will be able to appear in Moscow within a year and will replace 250 cafes of the American brand. Dmitry Medvedev, Deputy Chairman of the Security Council, also spoke about the alternative to McDonald’s.
In the social network “VKontakte” he said hello to the fast food chain and noted “cutlets and rolls, and of excellent quality, we can produce ourselves.” And businessmen who fell under sanctions could do this, according to Mr. Medvedev.
State Duma Speaker Vyacheslav Volodin proposed his alternative to a large fast food chain: “McDonald’s – 100% Russian raw materials – have announced that they are closing. And well, shut up. But only tomorrow there should already be not McDonald’s, but Uncle Vanya. Jobs must be saved and prices reduced. That’s the approach.”
However, it will not be easy for domestic players to achieve the scale of McDonald’s, says Igor Podstreshny, a restaurateur and owner of the Burger Heroes burger chain. The peculiarity of the American company is also in the uniqueness of production and internal communication, the entrepreneur notes: “When the network grows, it becomes a priority for other product suppliers. Due to this, good discounts, discounts on raw materials are obtained. The larger the scale, the more favorable the conditions for you at the rates, at the incoming price.
McDonald’s, of course, took the volume, due to which it received much greater preferences for relatively small players. Because of this, the American fast food chain had a rather low average bill, which is difficult to compete with.
In addition, a large-scale company with a serious turnover has more opportunities, funds for the development of the so-called back office – a management structure for standardization and development of production. This helps to perform each of the processes more efficiently, hire people, and train them more efficiently. McDonald’s is a serious and very stable player in the eyes of the consumer. It is much harder for small cafes, restaurants and even chains to build standards of this level and compete on the average bill.”
Without McDonald’s, the quality of service in Russian burgers may also fall, because the American chain set a quality model for small brands, explains Kirill Proleev, Marketing Director of the Stardogs chain.
According to him, local players will benefit from the influx of new audiences, but this advantage will be offset by a drop in purchasing power: “McDonald’s set the trend in terms of consumer promotions, seasonal offers, marketing tools that many brands copied and took as an example, the same lunches, seasonal novelties, promotions in the format of traditional loyalty programs. Accordingly, we have lost the trendsetter.
For example, there is a network of burgers with three to five outlets and a semi-finished product manufacturer that has a well-established line that gives a sample that matches the cost and quality. And this three-point customer is limited in choice, less able to dictate terms or make requests for refinement, cost reduction, or quality improvement.
If burgers unite under a single brand and can make requests for a completely new level of raw materials and delivery, then McDonald’s can occupy a niche.
In the same way, there is a threshold of optimal cost for a branded cup. To make it inexpensive, you need to have circulation in the millions.
The market that will free up with the departure of McDonald’s will, at best, replace the outflow of customers. We already see an increase in the cost of the next shipments from 15%. One way or another, customers who used to go to McDonald’s will go to other chains. The question is, at what level of cost will Russian fast food go.”
McDonald’s recently announced that it will temporarily close all of its restaurants in Russia from Monday. There are 850 fast food outlets across the country with more than 60,000 employees. This temporary stop will cost the American fast food chain about $ 50 million a month, Reuters reported, citing the press service of the corporation.