The US Fast-Food Empire Expands in Russia
So while the rest of the world is not impressed with the US government’s debt-ceiling debacle (a Chinese rating agency, Dagong, has lowered the US’s rating from A+ to A), the US seems in little danger of losing its front-runner position exporting its cuisine around the globe. Russia has become the latest magnet for an explosion in American fast-food outlets, says the New York Times:
American fast food has been going global for years, of course. And China and India continue to be big expansion markets. But lately, the industry is finding a growing appetite for its fare in Russia — not only pizza, but Burger King’s Whoppers, Cinnabon’s Classic Rolls and Subway’s barbecue pulled pork sandwiches, among others.
“As consumers have more disposable income they will spend it on fast food,” Jack Russo, a fast-food industry analyst at Edward Jones, said in a telephone interview. He compares the market here to the United States half a century ago.
McDonalds’s monopoly on the Muskovite fast-food market — it now has 279 restaurants in Russia, after opening the first in Pushkin Square in 1990 — is being threatened by Subway, which has 200 outlets. Wendy’s is hoping to open 180 throughout Russia by 2020. Starbucks also has 47 stores.
Fast-food restauranteurs have some advantages in Russia. As the New York Times points out, Russia has a “fast food infrastructure”: malls, highways with drive-through capacity, suppliers of frozen food and packaging. Russian consumers are also more and more affluent, largely due to “the trickle down from the nation’s lucrative oil exports.” While the average salary is $7,276 (versus $43,539 in the US), Russians have more funds available for discretionary spending:
They are unburdened by the hangover of consumer debt that has curbed American purchasing power. Nor do Russians have high medical bills because the health care system, if flawed, is largely socialized. The income tax is a flat 13 percent. And a majority of Russians own property mortgage-free, as a legacy of the mass privatization of apartments in the 1990s.
As a result, the fast-food chains find they can charge higher prices in Russia than in America. The average check at a Russian fast-food outlet — $8.92 according to research by a Wendy’s franchisee here — is significantly higher than the United States average of $6.50.
While describing the lucrative efforts of a former United States National Nuclear Security Administration staffer, Christopher Wynne, to achieve pizza domination via Papa Johns’ in Russia, the New York Times article doesn’t raise one other irksome export. Not a day passes here in the US — where at least one-third of the adult population is obese — that one doesn’t hear about a new study or claim about how bad fast food is for your health. Obesity, and health issues related to it including heart disease and diabetes, is on the rise in countries like Japan and India, where people have abandoned a traditional, far healthier diet and are also more sedentary in their lifestyle.
But no matter how bad everyone knows fast food is for them, people still get in line for their burgers, fries and pepperoni pie. Perhaps the takeaway lesson is: If you can’t win the hearts and minds of people with democratic ideas and reforms, go for keeping their bellies full?
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