Happy Mealski… A year after McDonald’s left Russia, its replacement, Vkusno & Tochka (translation: “Tasty & That's It”), is experiencing a growth spurt. After McD’s closed about 850 Russia locations, “Tasty & That’s It” took them over with a quick-and-dirty rebrand. The McD’s knockoff is on pace to have 900 spots by the end of this year, owner (and Siberian oil billionaire) Alexander Govor said.
Not the Big Mick: So far, it said it’s been serving about 2M people/day and has sold 24M+ “Big Hit” burgers (its version of the Big Mac).
Overtime: Gover said Vkusno & Tochka is “here for the long haul,” but McD’s has the option to buy back its locations within 15 years.
Checking in… An estimated 1K companies have ceased operations in Russia since it invaded Ukraine in February 2022. Chains like Starbucks, KFC, and Pizza Hut sold off franchise locations, retailers including Adidas and Nike shuttered stores, and financial companies like Visa halted transactions. A CNBC review of Dow companies suggested that, as of February, most had kept their promises to fully suspend or scale back their presence in Russia.
Workaround: Apple and Coca-Cola are being sold in Russia through third-party countries, even though the companies stopped direct sales.
Still there: Brands that haven’t cut ties yet are gaining market share as competitors flee. Earlier this year Russia imposed an exit tax to slow the exodus.
Breakups are hard on both sides… McDonald’s had been in Russia for 32 years before bowing out, and in 2021 Russia and Ukraine made up 9% of its revenue. Russia’s economy hasn’t been as hard hit by the exodus as economists predicted, but some Russian consumers have complained about their new knock-off economy. Apparently, they’re not lovin’ it.