The Story of the First McDonald’s in Russia

The gloomy morning of Wednesday, January 31, 1990, was marked by the important event in the history of our country. On this day in Moscow on Pushkin Square the first McDonald’s restaurant was opened in the USSR.
The fact is that it became not only the first, but also the last one, also gives the uniqueness to this event. The next restaurants were opened in a completely different country.

Opening of the first McDonald’s in Moscow. Photo by Yury Abramochkin, Ria News.

How it all began

Even in our time, the opening of new restaurants in the regions of the country is becoming a significant event for local standards. But then it was a completely different time: empty store shelves, an eternal deficit, the country stood on the verge of change and the opening of the first McDonald’s in Moscow produced the effect of a bomb exploding.

Expansion of McDonald’s into the territory of the Soviet Union came from the Canadian division of the company. The whole process was led by George A. Cohon.
13 years of negotiations and 50 million dollars of investment – that’s the price of McDonald’s appearance on Russian market.

Two years before the opening of the first restaurant, namely in 1988, McDonald’s Corporation received the permission from the Communist Party of the Soviet Union to set up the business on the territory of the USSR. Initially, all profits were divided in half between the company and the government of the country. Later, the company bought out all the rights.

In 1988, Moscow newspapers reported that the first Moscow McDonald’s would invite students and pupils to work, mostly on a part-time basis.
“Due to the intensive work, the payment will be high – two or two and a half roubles per hour,” the newspapers of those years wrote.

May 3, 1989, the construction of the first McDonald’s restaurant was started on Pushkin Square in Moscow.

It was the largest restaurant in the world at that time in the heart of Moscow and its opening was doomed to success.
900 seats inside and outside, 3 large halls – all this was built by Yugoslav builders at the site of the former cafe “Lira”.

Huge queues, in which people were ready to stand for hours, only to touch a piece of Western culture. 30 000 visitors were served on the very first day. It was a new world record!

On this day, McDonald’s philosophy of fast service and short waiting time literally collapsed. Russian people at that time saw everything in a completely different light. It was a kind of an attraction unknown to the village.

With an average salary of 150 rubles, the prices did not frighten anyone. Big Mac at that time costed 3 roubles 75 kopecks, and a hamburger – 1 rouble 50 kopecks. For comparison – 3 roubles is for that time a price for a monthly bus pass.

An interesting fact is that the Soviet man was accustomed to pay for Western goods in foreign currency, McDonald’s accepted only roubles, which practically did not cost anything outside the country.

George Cohon and staff of the first McDonald’s in Moscow

What happened next?

The second and third restaurants of network opened in 1993 on Old Arbat and Gorky Street (now Tverskaya Street).

The first restaurant outside the capital was opened in St. Petersburg in 1996.

Also in 1996, McDonald’s company launched the first in Russia concept of customer service on cars – McAvto, working on the principle of several windows. It allowed people to order and receive products while staying in a car.

In 1992, McComplex was opened to produce semi-finished goods, which produce about 70 million kilograms of products a year.

In 1995, the Charity Foundation “Ronald McDonald’s House” was established, which still provides assistance to children in need.

First visitors of the first McDonald’s in Russia

What is the secret of the company’s success in Russia?

In Russia, McDonald’s built a completely independent organization with its farms to supply potatoes, their processing enterprises for the production of buns for hamburgers, meat, apple pies and other products for restaurants.
As it turned out, potatoes grown in Russia did not fit the McDonald’s standards and the company had to start everything from the scratch. Experts and necessary potato tubers for planting were specially brought in from the US.

At that time, the situation in the country of the Soviets was not very optimistic and there were no chance of profit. But the head managers of McDonald’s perfectly understood the potential.
Obviously, the company worked for the future and when the Russian economy began to develop, the costs paid off more than one hundred percent.
All those factors helped to achieve significant success, but in fact, expansion is only in the beginning since in many regions there are no restaurants yet, so the opportunities for growth are simply huge.

McDonald’s Nowadays

Today there are 635 McDonald’s restaurants in Russia. This is quite a bit. In the homeland of the corporation in the United States there are already more than 34,000.
The largest number of restaurants are located, of course, in Moscow and St. Petersburg.

The company plans to actively expand the market, and there is also a possibility to establish a chain of deliveries of semi-finished products.

Until recently, all operating restaurants in Russia belonged to the McDonald’s corporation, now it was decided to start the activity of selling franchises of restaurants. This decision was made because of the active pressure of competitors.
The opening of franchising enterprises will allow even more vigorous development. The main directions are Siberia and the Far East.