On March 8, local time, the "Golden Arch" McDonald's announced that it would "temporarily close" all 850 chains of fast-food restaurants in Russia, at this time, the brand held a grand "McDonald's thirty years in Moscow" commemoration event on January 31, 2020 (launched only 3 rubles, A little over two years after a little more than two years, just over two years ago, when McDonald's entered Red Square with a high profile, and the news photos of Moscow citizens lining up outside the store instantly caused a sensation in the world, just 32 years ago.
The Western "FMCG" brand "into the establishment" into the Soviet/Russian market, the pioneer is known as the "American working class drink" Pepsi. On the eve of the 1959 U.S. National Exposition at Moscow's Sokolniki Park, Donald M. Kendall, head of Pepsi's international department, secretly called on visiting U.S. Vice President Richard Nixon at the U.S. Embassy in the Soviet Union and persuaded the latter that "Pepsi must be brought to the meeting in the hands of Nikita Khrushchev, the supreme leader of the Soviet Union who came to visit the venue." So, on The same day that Nixon-Khrushchev broke out at the venue on July 24, the world-renowned "Kitchen Debate", Pepsi And Khrushchev "shared the frame". Kent also relied on this huge success, from a department manager to a high position as chairman of PepsiCo.
Pepsi took this opportunity to successfully enter the Soviet/Russian market: in 1975, PepsiCo successfully became the first American private consumer enterprise to set up a factory in the Soviet Union in exchange for helping the Soviet Union sell red-card vodka (Stolichnaya vodka), and in 1977, Pepsi successfully won the exclusive right to "exclusively" carbonated drinks in the Soviet Union, thus keeping its rival Coca-Cola out of the "Iron Curtain" until 1985.
At this time, Coca-Cola, as the sworn enemy of Pepsi, still seems to be unresponsive, but McDonald's, which is inseparable from Coca-Cola, has no one to sit still: what Pepsi Can Do, why can't McDonald's do it?
However, unlike Pepsi Cola, which was portrayed as the "drink of the American working class" in the Soviet Union, McDonald's has always been regarded as a "symbol of the American bourgeois lifestyle", and americans have seriously analyzed the motives of the Soviet Union in boycotting the 1984 Los Angeles Olympics in the National Review magazine, one is to retaliate against the United States' boycott of the Moscow Olympic Games 4 years ago, and the other is that "the United States is full of McDonald's, and the Soviet Union is afraid that athletes will slip away to enjoy it and contaminate the bad habits of capitalism". A brand that can take root and grow in the red empire.
Because of this, McDonald's initially did not fight the idea of Russia, but wanted to win the food concession for the 1980 Moscow Olympics, using this almost advertising sponsorship method to achieve the intention of "appearing in Moscow".
McDonald's sent a strong delegation to Moscow 4 years in advance to start negotiations with the Russians. The representative they sent was a 39-year-old middle-aged man, born in Chicago, USA. George Cohan.
Speaking of this Kohan, he is not a simple character. This person was 11 years old in the plume shop as a guy, did a variety of odd jobs, 20 years old to save enough tuition, went to Northwestern University Law School, after graduation became a well-known lawyer, but he was not at ease with the dull life of the law firm, in 1967, he won the McDonald's Canadian East franchise, only 4 years to let the Canadian McDonald's and himself, both became the "second boss" of the McDonald's fast food empire. McDonald's executives accepted that if there was anyone who could persuade the Red Empire to open a window for McDonald's, that person could only be Kohan.
Kohan took the challenge seriously, and from 1976 to 1979 he flew to Moscow again and again, for more than 10 days at a time, painstakingly running between ministries, lobbying, and struggling between rubber stamps and red-headed documents. Because of his frequent visits, every time he stayed at the Moscow "city hotel" waiter, he could call out his name at once.
In 1979, only a year before the opening of the Olympic Games, he once received news that there was a door, so he rushed to Moscow and waited for 17 days in the city hotel, but the reply was "Nirvana (Russian, no)", with the Soviet invasion of Afghanistan and the subsequent American resistance to the Moscow Olympics, McDonald's, the "symbol of AMERICAN imperialism", and the Olympic delegation of "US imperialism", failed to appear on the Olympic stage as promised.
The returning Kohan was derided by Pepsico and its partners as a "mad Kohan," and even his own people inside McDonald's began to question: Yes, how could it be, the idea that "the symbol of the American bourgeois way of life" appeared in Moscow, the heart of the Soviets, was crazy.
However, Kohan and McDonald's insist that there is nothing wrong with the idea of entering Russia, which in Kohan's view was the only potential market in the world at that time that was "over 100 million people, quite highly industrialized, and blank in terms of fashion urban consumption", and they had no reason not to pay attention.
Not to mention that they have no choice: since 1977, Pepsi Has swallowed KFC, Pizza Hut and Tekobel in succession, becoming a behemoth that can fully compete with the McDonald's-Coca-Cola alliance in the fast food industry and carbonated beverage industry; not only that, "Colonel Sandoz" is also actively exploring the Chinese market, and has achieved initial results.
According to Kohan himself, he traveled back and forth between Toronto and Moscow several times over the course of several years, "playing promotional videos, distributing pamphlets, distributing McDonald's commemorative watches, and braving the cold wind to investigate the market with various gods and immortals", and it was not until 1987 that he finally had an epiphany: he must find the right "threshold".
The right threshold he found was the Moscow Municipal Government. At that time, the Soviet Union had begun to "think new", the city of Moscow was eager to develop commerce, and Kohan tried to convince the latter that the McDonald's gold logo itself was a natural catalyst for the rolling traffic.
More than two years later, the day finally came: at the end of 1989, he finally got a reply from the city government: he agreed to open two branches of McDonald's in Moscow.
The overjoyed Kohan and McDonald's immediately took action, placing advertisements, recruiting manpower, preparing raw materials... There's a lot to be done. McDonald's didn't get carried away, and they decided to open one first, in pushkin Square on CoverStraße in the center of Moscow, on January 31, 1990.
It was a cold day of minus 15°, with thin snow still on the eaves, and Kohan, who had arrived at the door early in the morning, was almost surprised to forget what he had come to do - more than 5,000 Moscow citizens lined up in an orderly long line and circled Pushkin Square for a full 3 times, just to "taste capitalism". On this day, every customer who visits has to wait in line for at least 3 hours, and then must finish eating and leaving within 20 minutes, because there are still a large number of people waiting behind them to hide in the cold wind!
Kohan and McDonald's were actually prepared: they hired as many as 480 employees in shifts, abolished the traditional "McDonald's menu", and all of them could only choose one set menu: a big Mac, a Medium Coke and big fries, priced at 5 rubles, Rao was so, everyone was still busy: on this day, McDonald's in Moscow poured in 30,000 customers, turnover exceeded 150,000 rubles, the exchange rate was about 200,000 US dollars, and the craziest young man actually lined up 5 times. It took 15 hours, ate 5 5 roubles set menus, and spent 25 roubles for meals – which at the time was equivalent to 1/8 of the monthly salary of an ordinary cadre.
This day is known as "McDonald's Moscow Golden Arch", regardless of passenger flow, turnover, set a historical record of McDonald's, and has not been broken to this day. Pushkin Square's world record of 900 seats and 27 à la carte counters has not been broken until the "closed for business". Until the "suspension of business", the store remained mcDonald's largest branch in the world, with an annual traffic of around 200,000, while the daily traffic of the All-Russian McDonald's chain remained around 2 million all year round.
The 10th, 15th, 20th, and 30th anniversaries, the McDonald's Pushkin store has held a grand commemorative ceremony, and McDonald's partner Coca-Cola has always been actively involved - without this "golden arch", Coca-Cola would have to wait several years to set up a bottling plant in the Soviet Union. The store has created many legends: Mikhail Gorbachev, Boris Yeltsin and Vladimir Putin have all visited, and pictures of "Lenin's Tomb guards with Jumbo in hand" have spread around the world.
But all of this came to an abrupt end with the so-called "special military operation" in Ukraine on February 24: on March 8, the "Golden Arch", Russia's "signboard for embracing Western consumer culture", disappeared from Moscow's Red Square and even russia as a whole. To this end, McDonald's gave up 9% of its global turnover, 3% of its operating profits, and had to continue to pay as much as 62,000 Russian employees basic wages in order to maintain its brand image.
In this regard, Chris Kempczinski, head of a Russian chain store, said that the "FMCG" brand and global public relations reputation are closely linked, when McDonald's entered Red Square, for the entire brand to earn a lot of "embracing the Soviet new thinking" reputation and word of mouth, global dividends. However, water can carry boats, but also can overturn the boat, now in Europe and the United States and even many important markets in the world, russia launched this war against Ukraine, is a major negative, at least major controversial hot topic, "waving away Moscow" has become the "political correctness" of the "fast consumption" market, the always sensitive McDonald's would rather paste tens of thousands of employees' basic salaries to "quickly withdraw", its core purpose is to "cut stop loss", to avoid its brand image and market heat in the global market, dragged down by what happened in Ukraine.
McDonald's is far from being the only overseas "FMCG" brand that "fled" the Russian market after February 24: on the same day, Starbucks, which had theoretically been transferred to a Kuwaiti company, announced that its 130 chain stores in Russia were "suspended"; a day earlier, the world's largest fast food brand portfolio, Yum Brands, announced the "suspension" of the operation of its two main brands, KFC and Pizza Hut, in all stores in Russia (1,000 and 50 stores, respectively); and "Yum" has deep roots and the earliest "" "" Embracing Moscow, Pepsi Announced a day earlier by its director, Ramon Laguarta, to "suspend" all beverage operations (which means that Pepsi, a Western "FMCG" brand that has been selling well in Russia for more than 60 years and the first to enter Russia, has also "goodbye"). A team of Jeffrey Sonnenfeld, a management professor at Yale University in the United States, found that in just half a month from February 24 to March 8, more than 290 of the 340 overseas "fast-moving consumer" brands that were originally active in the Russian market had more than 290 "flash-ups".
The Sonnenfeld team believes that this is the largest "cutting stop loss" in the global market since the United Nations sanctions on apartheid prompted the international "FMCG" brand to flee South Africa.
Some business and public relations experts, such as Mark Hass of Arizona State University, Richard Painter of the University of Minnesota, And Ford of Indiana University, believe that the vast majority of international "fast-moving consumer" brands that actually participate in the "flash mob" have prejudged the brand public relations risks in the Russian market, and to a large extent, they have taken precautions, and McDonald's and "Yum" have invariably adopted "white glove tactics" for the sworn enemies of the mall. (As mentioned earlier, Yum's Pizza Hut and McDonald's handed over all their stores in Russia to a third-party company to operate a few years ago), in the first few days after the crisis escalated on February 24, at least the "old predecessors" like McDonald's and Pepsi Cola, who were the first to open up the Russian "fast-moving consumer" market, were still in love, and their decision-making levels continued to release the "withdrawal information" of "operating in Russia are third-party companies, we just hang a card", and tried to convince the "political correctness" pressure with the "employees of the Russian branch are innocent" human sentiment card.
But it turns out that once the wheel of "political correctness" rolls, it will not be spared, layer by layer: as many brands and public relations analysts have said, in the face of major public opinion "bombs", the "white glove tactics" are vulnerable - "bad reviews" will directly hit the brand itself, and the commercial interests and brand image related to it will be beaten to pieces, without caring about which of them are self-operated and which are agent-operated.
In the end, McDonald's and Pepsi's still waved goodbye to Moscow step by step: McDonald's would rather post the basic salary of more than 80,000 employees in Russia than risk global business interests and brand image; LaGarta of Pepsi Cola vainly nagged several times that "20,000 employees in Russia are really pitiful" but no one echoed it, and finally only in Russia on the grounds of "humanitarianism", retained its baby food business.
The Sonnenfeld team believes that if the Ukrainian crisis does not end in some "guaranteed" and accepted way by the global market, the trend of international "FMCG" brands "cutting away from the Russian market" will be difficult to reverse, and the final risk will only be those who have a large Russian market share, leaving the Russian market risk and cost much higher than staying in the local area regardless of "political correctness" - but is there really such an international "FMCG" brand?
As Haas said, the "escape from Russia" of the international "FMCG" brand is a direct blow to the latter consumer market is limited, after all, you can drink kvass without drinking Coke, and you can also eat Black Lieba fatty pork without eating hamburgers, "However, when muscovites around these international 'FMCG' brands have been familiar with and used to these international 'FMCG' brands for decades, they will eventually think of a lot of things."