McDonald's Corp said 26 February it will open at least 40 new stores in Russia this year at a cost of about $120 million, betting the country will remain one of its most dynamic markets despite the economic downturn.
-- To invest about $120 mln in new Russian stores
-- See Russia remaining one of most dynamic markets
-- Cuts prices to gain from bigger turnover
Khamzat Khasbulatov, the head of the fast-food company's operation in Russia, told Reuters on Thursday it cost about $3 million to open a new store and that the company would open at least 40 this year. He declined to give an overall investment figure.
"I can't say we have gained from the crisis by taking the share from more expensive restaurants," Khasbulatov said in an interview.
"The recession has had an impact on our customers and we haven't gained from it ... We won't see the previous pace of growth of 15-20 per cent a year anymore," he said.
"But Russia remains the most dynamic, fastest growing and profitable market for our system." McDonald's already operates 240 stores in Russia. It plans to open about 500 stores in China in the next three years.
Cheap restaurant chains typically show resilience during financial downturns as diners seek lower-priced fare, and McDonald's reported better-than-expected results earlier this month.
US drinks maker Coca-Cola Co said this month it would invest $1.2 billion in Russia over the next three to five years as it bets sales of the carbonated drink will increase during the economic crisis.
McDonald's has opened four new stores in Russia so far this year and plans to open 20 more by end-February, mainly in big cities such as Moscow and St Petersburg, which saw the opening of hundreds of super-expensive restaurants during the previous years of Russia's economic boom.
Many of those high-end restaurants are now closing down, or are half-empty as personal incomes shrink and unemployment rates rise fast. Khasbulatov said, despite a 35 percent devaluation of the rouble against the dollar in the past few months, the company has lowered some prices to gain from bigger turnover.
He said it would try not to increase prices above annual inflation rates of between 13 per cent and 14 per cent. "We will expand the products on offer at affordable prices. This is why our position has more advantages compared to other players," he said.