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Fastfood Business in Russia
April 5, 2011 14:15


Russian market of fastfood has changed in recent years. New brands appear in Moscow and other cities, most of them came from abroad, the old ones are trying to introduce new services to retain their positions.

Konstantin Petrov, Dunkin' Donuts CEO, said in the interview to Lenta.ru, that Moscow, compared to some other world capitals, still is not full of fastfood restaurants. "Especially there are not so many coffee shops of our scale and we would like to develop. Every European or American citizen already has a morning tradition to come to a coffee shop, on his way work and buy something for the breakfast. In Moscow this tradition is just being developed, unfortunately there are not so many good coffee shops around the city", — says Konstantin Petrov and adds that the company had brought Dunkin 'Donuts brand to Moscow due to the feeling of consumer's interest. The chain has 10 restaurants and it is planned to open about 50 new restaurants by 2013. According to Pertrov, the company wants to open some restaurants in St. Petersburg, Yekateringurg, Sochim Krasnodar and Novosibirsk.

"Founded in 1950, Dunkin' Donuts is America's favorite every day, all-day stop for coffee and baked goods. Dunkin' Donuts is a market leader in the decaf coffee, iced coffee, hot flavored coffee, donut, bagel and muffin categories, and the largest coffee and baked goods chain in the world", according to Dunkindonuts.com.

Gennady B. Kochetkov, vice president of business development of Subway Russia, also added, that fastfood restaurants and coffee shops serve different functions in the market, — "They are different and it is not correct to combine them. All fastfood enterprises have two functions: the first consists in feeding people and second one is to provide a place to party. Coffee shops are places to hang out, the issue of feeding is on the second place, the main thing is connecting people, so you may come to such a place, buy the most expensive coffee cup and talk to your friends. People are ready to pay for a communication. What about fastfood — it's social function is less expressed. People come here just to eat quickly and go away. That's why in districts the popularity of coffee shops may be higher than in other, as in residential quarters people prefer to eat at home and to hang out somewhere else". Kochetkov added, that besides Moscow, the company has a developing chain in the South: the Krasnodar territory, Rostov, also Ural and Baikal regions are developing very fast. He noted, this may caused by the absence of other popular brands. "If there is an infrastructure and local businessman has a desire to open a restaurant, we do everything possible to help him", — says Kochetkov.

According to Lenta.ru, the main problem of starting fastfood business in Russia is a shortage of commercial space. Gennady Kochetkov said: "Once of our franchisees went to Malta and decided to open a restaurant there. He started a new Subway in a posh place in a hotel for 2 000 euros a month. In Moscow it may cost for about 20 000 euros a month. To, this, is the main problem in Russia is high rental prices. Another problem is pooply developed infrastructure and that's why Subway uses the local existing business infrastructure in each region. So if there is no infrastructure in a region, we do not enter that region's market. We recommend the limit value for rent of 20% of total sales, when the rent is higher, we do not consider this site would be suitable for a business".

Russian market differs from the western market. Almost because it's much more younger and therefore attends much more interest. The competitive environment is not too aggressive and sales are high, according to the suggestions of Konstantin Petrov.


Sources:
lenta.ru
dunkindonuts.com
subway.ru


Tags: Russian business Russian trade    

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