Let the Russians Eat (and Serve) Big Macs!
By Sean at 22 December, 2008, 10:06 am
Russia’s “oil-fired economic miracle is unraveling,” the protests over the car tax is being hailed as a sign of “broad discontent,” unemployment grows by 400,000 in November with an extra 70,000 this past week alone, Russia’s richest man, Oleg Deripaska, is looking for investors wherever he can to save his metal empire, and Putin is imploring Russia’s business to only fire people only if it is absolutely necessary. From reading today’s English language press, one would think it was February 1917 all over again.
Luckily for all of Russia’s unemployed and redundant labor, there is one business that might be hanging “Help Wanted” signs as the rest of the economy goes down the toilet: McDonald’s.
In an interview in Vedomosti, Khamzat Khasbulatov, Micky D’s man in Russia and Eastern Europe, had this to say about how the economy has affected his company’s ability to peddle cheap, overly processed burgers.
Have McDonald’s felt the crisis in Russia?
No.
Many companies are up in arms about operating funds. Do you have a problem with liquidity?
No, but it’s known that there is no money. The truth of this claim is now strongly felt by those whose businesses are built on borrowed capital. When businesses are created on the basis of rapid growth and sustained credit, the problems can be very serious. Today even experts can’t predict the depth of the global crisis, its duration, or its consequences. History has shown only local and continental crises: the depression in the USA in the 1930s, the Latin American crisis of the 1980-90s, the crisis in Asia in the mid-1990s, the Russian crisis of 1998. At the moment, we don’t feel the influence of this crisis.
Forget about Khasbulatov’s selective history and geographical mapping of past crises of capital, the big question is why is McDonald’s so economically resiliant. One clue might be in Khasbulatov’s recollection of McDonald’s performance during the 1998 crisis.
How did the 1998 crisis effect McDonald’s?
We had to lower our costs but there was an increase in the number of visitors for the most part because we increased the assortment of products at a low price. Taking into account that our customers are people with a low income, we must be more balanced in how we determine prices. We’ve always maintained the rule that the growth of our prices must be below the rate of inflation. We have the resources for this. Almost 80% of our products in our restaurants are produced in Russia, and we are less subject to the course of fluctuations than many players in the market. In general, our position in 1998 was so stable that we did not attempt to lay these expenses on the consumer.
And what are McDonald’s profits in Russia? “This is secret information,” says Khasbulatov.
One thing is that Ronald McDonald’s house looks like to be the one of the few bright buoys in a sea of darkness in 2009. The burger joint plans on opening new and bigger restaurants, remodel existing ones, expand their McKaffe stores, and expand the menu. Given that 75% of their employees are young people, I would image as unemployment increases, McDonalds are going to get a new rash of applications in the near future. As of 2005, the average McD’s employee earned about $250 a month. This has increased to about $400. Now that’s a bright future!
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We are going to McDonald’s tonight by the way!
Believe me they are packed and the battle for a seat is part of the fun eating at a Moscow, McDonald’s. Takes team work!
By the way, they now offer 10,000 Rubles a month as starting pay. $400.00 I have one of their in store flyer’s that advertise for a job.
Still a scary low wage.
Good article!
Kyle & Svetlana
Thanks Kyle. I was searching for what they pay and could only find 2005 figures.
Well, that’s certainly not good. I’m all for cheap food, but not something as unhealthy as Macdonalds…
“Khamzat Khasbulatov, Micky D’s man in Russia and Eastern Europe”
He’s a Chechen, by the way.
“Still a scary low wage.”
Isn’t that higher than the average pension?
My mother-in-law’s pension is roughly 3900 rubles/month. Perhaps it’s different in Moscow.
“He’s a Chechen, by the way.”
Chris, any relation to the once powerful Ruslan Khasbulatov?
“Chris, any relation to the once powerful Ruslan Khasbulatov?”
Not that I know of. R. Khasbulatov teaches down the street from where I live, incidentally.
To be fair, $400 isn’t bad for what is mainly a job for college students.
“Not that I know of. R. Khasbulatov teaches down the street from where I live, incidentally.”
Interesting. Thanks, Chris. I have no idea how common of name it is in Chechnya: it could be the equivalent of Williams or Johnson.
I used to work at a McD’s when I was in high school. As weird as it sounds, working there only made me like the food more. I have said this before, but one could live on a small amount of McD’s food alone, if combined with a vitamin supplement, and still stay pretty healthy, especially if combined with regular exercise. The human body is made to survive on fat, we just need to keep moving so that it doesn’t all go to our waists.
It’s not as if the traditional Russian diet is any healthier, though. If you look at pictures of Russian women and men after the war and before McD’s made its way into Russia, it’s pretty obvious that plenty of Russians were getting more than enough calories in their diets. I mean, how many skinny babushkas do you see, and they likely don’t eat much fast food.
“I used to work at a McD’s when I was in high school. As weird as it sounds, working there only made me like the food more.”
Good Lord. You never had to clean the flue over the cooker, did you?
I mean, how many skinny babushkas do you see, and they likely don’t eat much fast food.
I remember being told that McDs is a popular place for young Russians to go on a date. Is that still the case? Or has that fad ran its course?
For those who eat ’salo’ and chicken skin all their lifes, McD is a huge dietary improvement.
You know what Mickey D’s in Moscow is really good for? Breaking large ruble notes. I don’t know if it’s a matter of policy, or just if they never have a problem with running out of change, but I used to break the seemingly unbreakable 5,000R notes there by buying an OJ. Never a complaint.
Like the guy said, no problems with liquidity.
“I remember being told that McDs is a popular place for young Russians to go on a date. Is that still the case?”
Define “young.” High school maybe. I think most people just gulyat. That’s what I usually do on a date. Not that I’ve had one in months.
“chicken skin all their lifes”
Like most Americans?
That’s what I usually do on a date. Not that I’ve had one in months.
Are you counting our milkshake?
You never called, Tim, you bastard!
You never called, Tim, you bastard!
I wanted to, only Averko flew into a jealous rage at the mere mention of our milkshake.
”You never called, Tim, you bastard!
I wanted to, only Averko flew into a jealous rage at the mere mention of our milkshake.”
I knew it all along. There I was entertaining Doss in Connemara and he was running around with Newman in Moscow! CHEATER!
I’ll have to go back to Averko!:-(
You should have bought me a milkshake.
I can say the McKafe in Yaroslavl is quite popular with my in-laws. They indicate its price, cleanliness, and quality are difficult to find anywhere else in the city.
In fact, they were sorely disappointed with McD’s when they visited here (I didn’t want to go, but they insisted) and they wished we had McCafe’s in New England (mostly they are located in the mid-west, as I remember.)
Their mental picture and associations with McDonalds as a product are likely quite different than Americans.
As to those mentioning the unhealthy quality of McDonalds food – it should be remembered the menu abroad is quite different than what we serve here. Also, it has been proven that you can eaten quite healthily at McD’s, if a person so chooses. However, the typical American is going to shovel burgers and fries down their gullets, rather than yogurt and salad.
I like a good burger every now and again, but I sure don’t go to McD’s for that. After my last West Coast road trip, I’m envious there are no In-n-Out Burgers to be found in New England.
Some interesting notes, as I was looking for a menu for Russian McDonalds/МкКафе … as of 2005, McDonalds was the largest corporate land-owner in Russia (according to March 2005 issue of “The Agribusiness Examiner.”)
Also, McDonalds employs more than 10,000 people in their Russian restaurants and at McComplex, a central food processing plant in the Moscow suburb of Solntsevo. Each new restaurant creates about “100 new job opportunities for local citizens.”
Every HOUR, McComplex produces:
- 15,500 buns
- 2,900 liters of milk
- 15,000 kg. of beef patties
- 13,500 pies
I guess the pies are quite popular.
The products from McComplex are exported to 17 other countries, including “Belorussia, Ukraine, Moldova, Crech Republic, Hungary, Germany, and Austria.”
Reportedly, McDonalds opened 40 new restaurant locations in Russia in 2008.
As just a business venture, it’s fairly impressive.
Merry Christmas!
From Kyle & Svet
“I can say the McKafe in Yaroslavl is quite popular with my in-laws.”
I’ve been in that McDonald’s. My roommate is from Yaro.
Mickey D’s uses only local produce too. I think the place gets a bad rap.
“chicken skin all their lifes”
Like most Americans?
Actually, we Amerikanetz eat processed chicken skin, fat, and other chicken parts, pressed into a patty or nugget, covered in crispy breaded coating, and deep fried in saturated fats.
Mmm.
Mmm.
I really try to avoid such foods, although I do eat out about twice a month, on Fridays, with my kids (either pizza, chinese take-out, or local chain restaurant such as the 99.)
Katja’s work as a cashier at the world’s largest grocery/retail store has opened her eyes to how little whole, unprocessed, foods most Americans eat. Katja and I cook or prepare almost every meal (that was always my custom) but many Americans just open a box and heat up something in the oven or microwave. I spend time every weekend showing my kids how to cook and prepare food.
That’s what I usually do on a date. Not that I’ve had one in months.
How do you NOT get any play in Moscow? Not to reinforce stereotypes, but it’s a little bit like fishing in a stocked-pond.
“How do you NOT get any play in Moscow? Not to reinforce stereotypes, but it’s a little bit like fishing in a stocked-pond.”
It was five years ago. Now I’m too old and too antisocial!
Mickey D’s uses only local produce too. I think the place gets a bad rap.
From what I have seen, the McD’s in Russia are far superior and better managed than here in the States. Depending upon location, McD’s here can be a real crap shoot as far as food, service, and cleanliness. It has much to do with how the local franchise owners conduct business.
I was really embarassed by the McD’s I visited when Serge and Natalia visited us here in the States. It was a pit and they expected better.
You are correct about McD’s in Russia using local produce, they cite 75% of the food is local sourced. They also do a good amount of charity work, which I think is not so common for businesses in Russia (my father-in-law complains about how tax laws in Russia effectively discourage individuals and small-businessmen from doing charitable work.)
“From what I have seen, the McD’s in Russia are far superior and better managed than here in the States.”
Absolutely true.
From what I have seen, the McD’s in Russia are far superior and better managed than here in the States.
The food is far better. McD’s in Russia and Europe don’t make me violently ill. McD’s in the States does and I haven’t been to one in years as a result.
Shedd, I had In-n-Out Burger last night. It was GOOD. Jealous much?
“The food is far better.”
Food quality is far better in Russia in general. Even my mom commented on it.
Not that I expect Candide to acknowledge rossiiskoe prevoshodstvo.
PS looks like I’m going to the Caucasus for Novy God.
I hope you all have a miserable, totalitarian Christmas. If Santa brings you books by von Mises, burn them! They are nothing but trouble.
In’n'Out within 3 miles. Nah, nah nah, Shedd.
We go to ‘In-n-Out’ at least once a week. So New England and Russia totally ‘отдыхают’ with all their ‘превосходствами’.
Although ‘Му-Му’ was quite good in winter 2006.
I find Mu-Mu’s food to be a little on the heavy side.
Dear all,
I wish all of SRB’s (and Sean himself of course) contributors a Merry Christmas and a Happy New Year! It’s been a pleasure conversing with you.
Best wishes,
RP
Anti-span word: CONNECT
Golden Bird rulezz in Khabarovsk, McDon must die!
As the Western Media has stated, the economy of Russia is not based “eggs in basket of all and one” as it is cynically say!
Service economics busineeses makes great stability fund!
Hi Sean,
I just found your blog (only just got into all this blogging malarkey) and I like it very much indeed (I recently finished my bachelors in Russian and my final year specialisation was Stalinism and Destalinisation so it’s interesting to read someone who’s also into Russian history).
A friend and I have recently also started a blog on Russia – I’m in Moscow and she’s in St. P. We’re translating opinion pieces and other interesting articles from the Russian press and also writing a bit about our own experiences here. Have a look if you’d like.
Anyway, just thought I’d say keep up the good work and I’ll be reading this more in the future. I was also wondering whether you were currently based in Russia?
All the best,
Caroline
Oops, I thought I’d posted the address but it hadn’t come up:
http://www.newsfromtheeastern.blogspot.com
“I was also wondering whether you were currently based in Russia?”
Nah. Sean’s a poseur. Tim and I are though.
Nah. Sean’s a poseur.
Aren’t you supposed to be vanquishing the Tatar hordes in Kazan? Stop playing on the internet!
Welcome Caroline and thanks for the kind words. But Chris is right. I am a poseur. I’m in Los Angeles.
Actually, I didn’t go. I started packing my bags and realized that I didn’t really want to. Wasted a lot of money on tickets though.
Hey, Chris. Your Kazan announcement was obviously a desperate cry for attention. Well, now we are aware of your pathetic little ploy.
P.S. Not that any of you will care (or care deeply), but I’m packing my bags to fly to Burkina Fasso tomorrow morning. I think I feel like going.
Don’t be an ass, Kolya.
I’m in deep winter depression and can barely get out of the house. God I hate New Years vacation. 
”Actually, I didn’t go. I started packing my bags and realized that I didn’t really want to. Wasted a lot of money on tickets though.”
WTF? Are you taking the piss??:-) Mind you, I’m lazy too, and have went precisely nowhere except my local pub for the duration of my holidays, all of ten days. I’m sure Kazan would’ve been nice though. I remember when I’d go to the Boar House for a few pints (rarely admittedly) I’d deliberately go through Kurskii Vokzal from Kurskaya metro and look up at the huge Departures/Arrivals board, and daydream of leaving Moscow for the countryside. Moscow would wear the Devil down.
”P.S. Not that any of you will care (or care deeply), but I’m packing my bags to fly to Burkina Fasso tomorrow morning. I think I feel like going.”
I care about you Kolya!! However, I am unclear as to whether or not – as Pontious Pilate said to Biggus Dickus in ‘Life of Brian’- you are ‘wagging’ us? Are you really going there? If so best of luck.
” I’m in Los Angeles. ”
What ARE you grumbling about? Have you ever been in Connemara in winter?? Lucky bastard!!
Sorry, Chris. I was joking. I didn’t know that, as Churchill called it, that unwelcome black dog is with you right now. What an absolute drag!
Thanks, Ger. I changed my mind. I’m not going to Burkina Fasso.
I have to correct myself: it was a lie. I never intended to go to Burkina Fasso. Actually, I’ve never been to anywhere in the African continent. Maybe some day. At the same goes with Oceania.
Caroline, to be fair, Sean did live and conducted some research in Russia. What really happened is that the call of Hollywood was simply too powerful. But you know, before discovery future stars have to survive. Some chose to wait tables, others opt to work for a PhD in UCLA.
“WTF? Are you taking the piss??:-) Mind you, I’m lazy too, ”
No. I’m extremely depressed. Winter does this to me. So, I can be extremely depressed in Kazan and pay money for it, or be extremely depressed in Moscow and pay nothing. Plus, the last time I was in Kazan was with an ex-girlfriend, making it doubly depressing. Why don’t you go someplace exotic like Wales?
Chris, I know this is of no immediate help, but considering Moscow’s latitude, have you thought about getting those special lamps? A couple of Christmases ago at my sisiter-in-laws in Pittsburgh I met a researcher who’s been studying those things. She was not a wacky new-ager, but a brilliant Carnegie-Mellon post-doc. She said a significant number of people are negatively affected by the short days of winter and those lamps do make a big (and positive) difference. Not any lamp, though. She told us that unfortunately most of the lamps sold for that specific purpose do not really do the job. A certain spectrum is required. But if the lamp has the required spectrum the difference is quite noticeable. At least according to this woman. And I have no reason to disbelieve her.
Chris,
Just so you know… I’ve now taken on your case. The rule of thumb I was given when I lived as an ex-pat in Europe was that six years was the maximum time one could spend away from the U.S. and still manage to reintegrate as an American – with all the blithely childish optimism that entails. So, I’m on the lookout now for a suitable match among the Russian-speaking female community here in Northern California – a vast population really. Lots of IT types — so girls with jobs, which I think is what you need.
“Caroline, to be fair, Sean did live and conducted some research in Russia. What really happened is that the call of Hollywood was simply too powerful. But you know, before discovery future stars have to survive. Some chose to wait tables, others opt to work for a PhD in UCLA.”
Maybe Sean will appear in the new Beverly Hills 90210?
“the short days of winter”
All five hours of them. No wonder alcohol consumption in Russia is so high.
Maybe Sean will appear in the new Beverly Hills 90210?
New episodes start Tuesday!
“I’m in deep winter depression and can barely get out of the house. God I hate New Years vacation.”
Not sure if this makes your life brighter – but think about my place. I haven’t seen sun for … a couple of months? Even during the day hours it’s either fog or rain or snow.
I didn’t see the sun for 10 days in December and 28 days in September. I was working night shift.
I got plenty of sun on the White Beach of Boracay, though.
Well Moscow or Los Angeles, at this point in time as I stare out from my lovely obshezhitie into a Yugo Zapadnaia sky that has eternal 100% cloud cover I definitely know where I would rather be. But that said, I’m in no position to complain about Moscow – I’m from Liverpool, UK and it would just be lying to say that things are much better over that way!
Here’s an advice on how to deal with winter doldrums from England,
[Chrisius], “You ought to have a tantrum”.
http://www.dailymail.co.uk/news/article-1105266/Feeling-stressed-You-ought-tantrum.html
Candide,
Does this qualify as a Russian stress releaser?
http://www.youtube.com/watch?v=eFgYKQit0kk
that said, I’m in no position to complain about Moscow – I’m from Liverpool, UK and it would just be lying to say that things are much better over that way!
That would be true if you were writing from the Gaza Strip
Global crisis as Russians see it
The corridors in office buildings have either pluses or minuses. Let’s not speak about minuses but about pluses. Everybody knows each other; you can hear helloes, greetings, goodmornings.
But the last few months silence dominates here.
Crowds of clients just disappeared, nobody enters and asks:”Sorry, where can I find?..” , there are no more strangers smoking in common rest rooms, girls from nearby offices don’t rush in asking to change money for a change. The director of real estate office drooped off, you can’t hear scissors and hairdryers from a hairdressing salon, and women from the office you never could spell its name frequently hang “Closed for today” card. People drink a lot in the offices and it’s impossible to breathe in smoking areas. Visits of Santa and parties had been cancelled this year.
http://ua-ru-news.blogspot.com/2009/02/global-crisis-as-russians-see-it.html
The company where I work just hired a bunch of people. We must be special!
judging by the success of the McCafe coffee line, McDonald’s must have a top notch marketing/product development team