McDonald’s sales growth in Russia tops US, Europe

In 2012, the McDonald’s fast food restaurant chain increased its sales in Russia by 19.6 percent, SPARK-Interfax reported. Although growing costs prevented the burger chain from scoring a more successful year than 2011, McDonald’s has remained one of the most successful restaurant operators in Russia.

In Russia, McDonald’s Corporation is present through two subsidiaries: Makdonalds LLC, and Moskva-Makdonalds CJSC, which are responsible, respectively, for expanding the restaurant chain in Russia’s regions and in Moscow. In 2012, the chain’s sales surged 24.6 percent to 42.5 billion rubles (about $1.3 billion) in the regions, while edging up 5.7 percent to 12.9 billion rubles (around $400 million) on the highly competitive Moscow market. Combined sales thus rose 19.6 percent to 55.4 billion rubles ($1.7 billion).

Meanwhile, 2011 had proven even more successful for the company, with consolidated sales growth reaching 24.8 percent. According to an expert with the Finmarket Information Agency, a rise in production costs observed in 2012 pushed the cost of goods sold up to 9.8 billion rubles ($290 million) from 4.4 billion rubles ($136 million), which put a damper on comparative growth.

However, the chain’s 2012 results on the Russian market can still be viewed as very good, compared to the sales growth of 3.3 percent in the United States and 2.4 percent across Europe in 2012. “The U.S. market is highly saturated, and the company hardly opens any new restaurants there. In Russia, conversely, it is aggressively expanding into the regions, launching dozens of new restaurants a year, which explains the dynamics,” said Andrei Petrakov, restaurant industry expert and executive director of Restcon Consulting.

According to Petrakov, the potential of the Russian restaurant market will remain high for another decade. “Europe and the United States are 3–5 times ahead of Russia in terms of the number of fast food outlets. It will take us a while to match those figures,” the expert said. Rosinter Restaurants LLC spokesperson Yelena Mazur, in turn, noted that fast food chains are poised for the most active expansion in the restaurant industry, benefiting from higher sales volumes.

McDonald’s boasts a total of 377 outlets in Russia, including 46 restaurants launched last year and 37 opened in 2011. In the next three years, McDonald’s plans to open another 150 restaurants and is set to develop its franchise business, said McDonald’s Russia CEO and president of its Eastern Division, Khamzat Khasbulatov, in February 2013. “Russia is one of our largest markets where the company runs its own restaurants. Overall, Russia is a very important development step,” the company’s report indicated.

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