Lyudmila and Pyotr were even surprised when they saw a large yellow M in a corner of Moscow’s Leningrad station. The couple, who were on their way to Petersburg from Khabarovsk in the Far East, did not hesitate for a moment. “All the restaurants in eastern Russia are closed. We only had to wait ten minutes here and we already had something to eat,” says the little blonde Lyudmila, sticking in a half-empty bowl of chicken nuggets.
In March, McDonald’s and hundreds of other companies announced that they would temporarily or permanently close their branches in Russia in protest of Russia’s invasion of Ukraine. But a handful of franchise departments remained open at the stations and airports. It’s very busy there. “We are not going anywhere,” says employee Dilsjod behind the counter, where his colleagues announce the orders to the many waiting.
Although the departure of the typically American fast food chain was described by Western analysts as ‘the end of an era’, many Russians shrugged at the closure. Western companies, now blowing so high off the tower, will return by themselves, so it sounded sober. Three months later, that estimate seems right in many cases. Behind the scenes, many brands are feverishly adapting to the new Russian reality. ‘Rebranding’ – to change legal owner, name or house style – is the magic word. Some companies operate more transparently than others.
‘Tasty and point’
In mid-May, McDonald’s announced that it had sold the company to Siberian coal billionaire Aleksandr Govor, who already owns 25 franchise companies. Govor received the entire ‘restaurant portfolio’, which he was allowed to develop under a new brand name. What name it will be has been the subject of heated discussions on social media among Russians for weeks. Will it be ‘Funny and Delicious’, ‘RusFood’, ‘Uncle Wanja’ or ‘MakDak’, as the chain is nicknamed?
On Sunday, when the first restaurants in honor of the national ‘Russia Day’ opened, the Russians were released from the excitement. The new name is ‘Tasty and point’ (Vkusno and totchka), which led to a lot of hilarity on social media. The logo is also cryptic: a circle with two stripes on a green background, according to the chain a stylized hamburger with two fritters. “The name has changed, but the taste is the same,” reads the message on a giant banner on the facade of the branch in Pushkin Square, where Russia’s first McDonald’s opened in 1990.
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According to anonymous sources, American names such as Big Mac, Big Tasty and McFlurry disappear from the menu, as well as dishes for which no alternative suppliers have been found. But management has hardly changed, and more importantly, McDonald’s has reserved the right to buy back the restaurants for the next 15 years.
Continue on your own
Many other companies follow a similar procedure. They have been forced to sell their property to a Russian entrepreneur, who is embarking on a fresh start under a new name. Or else the Russian branch has been separated from the international and continues on its own. For example, the Russian division of the consulting firm PricewaterhouseCoopers (3,700 employees in eleven Russian cities) will continue to operate independently under the name Technologies of Trust. Franchise companies often make their own assessment, leading to confusion among consumers.
Many brands have found goat roads through countries that do not participate in international sanctions. For example, the Polish retail company LPP from Gdansk sold the Russian branches of its clothing brands Sinsay, Reserved, Cropp and Mohito to Chinese owners. Although the clothing appears to be the same, the Chinese are not allowed to use LPP’s trade names and trademarks, the agreement states. A solution was found in abbreviated brand names: Sin, Re, Cr and M. The Russians just have to settle for that.
Many brands have found goat roads through countries that do not participate in international sanctions
Turkish companies also seem to benefit from and take advantage of the sanctions. For example, the Turkish holding company FLO Retailing succeeded in acquiring the more than one hundred Russian stores of the sports brand Reebok, and the company is now chasing the jeans brand Levi’s. Privateer on the coast is Turkey’s Fiba, which operates franchises of clothing stores Marks & Spencer, Gap and Banana Republic in Russia. There has also recently been some movement again at the Swedish furniture retailer IKEA, which is popular in Russia. Although the stores are currently closed, the ‘exchange and return’ department suddenly reopened in early June.
Some rebranding processes are shrouded in secrecy. The French luxury cosmetics brand l’Occitane en Provence closed its doors to its more than one hundred stores in March. In mid-May, the company announced a definitive exit from Russia, declaring that it “will no longer sell products to Russian retailers.”
The Russians were therefore surprised to see that the stores reopened last week, with the same shampoos, creams, aftershaves and fragrant lavender bushes on the shelves as before. Only the French brand name, with Latin letters on the shop facades, seemed to have been replaced on some with the same name in Cyrillic. While there are reports that the Russian branch will continue to be independent, Petersburg’s customer service news site Fontanka was told that “nothing has changed legally” and that the stores still belong to the headquarters in Luxembourg. L’Occitane did not respond to inquiries from NRC†
There is no doubt that Western sanctions against Russia hit certain sectors, such as shipping and aviation, the drug market and the automotive industry, causing billions in losses and headaches. Many Western companies are caught between the prospect of expropriation, which Russia threatens to sell to Russian entrepreneurs (often at a much lower price), and the search for investors in countries not participating in the sanctions.
Three-quarters stated that the departure of Western companies is unlikely to have any impact on their lives
“We are all trying to find a smart way to leave Russia. There is an ethical discussion, and reputational damage must be considered when considering selling, or rather donating, to a Russian oligarch,” sighed a French banker at the end of April. Financial Times† Three-quarters of Russians recently stated in a poll that the departure of Western companies has had little or no impact on their lives, while others welcome exit. Special waste containers have already been discovered in the Urals, where citizens could dump their ‘western junk’. Russian government leaders, who are not already loyal customers of IKEA or McDonald’s, are not bothered by the closed shops either.
Russian propagandists, meanwhile, are rejoicing. “We [Russen] do not just accept your closures of our shops and factories, and neither will others, “wrote political correspondent Dimitri Kosyrev from the state news agency Ria Novosti in an op-ed last week. “In this way, we show the whole world that you have to fight against boycott and other idiocy. Now someone will think ten times before playing such a trick again. “
A version of this article was also published in the newspaper on June 13, 2022