A Troubled Legacy: McDonald’s Withdraws from Russia
By Stephen Wilson, one of our reporters abroad
New restaurant logo
McDonald’s means different things to many people. For an American English teacher in Moscow, it is the only restaurant he could afford. For a Russian Transport policeman, dining there is a sign of prestige to be boasted about. For desperate people is it a convenient for their 'call of nature.' And for some of the homeless a place to wash themselves early in the morning.
For many people, the restaurant represents everything which is bad about America: junk food blamed for obesity, cheap labor, the most monotonous dead end jobs as well as the spread of globalization where you are forced to do everything faster and faster. A sociologist George Ritzer argues in his book 'The McDonaldization of Society' {1994} that the pervasive influence of the restaurant has grown to encompass all parts of society: in education, and in entertainment where people expect not only fast food but to go in for fast sport and read shorter stories. McDonald’s is part of a 'need for speed movement.'
BASIC PRINCIPLES
McDonald’s is the most manifest symbol of capitalism. The basic paradigm was undoubtedly inspired by the just-in-time process borrowed from Taylor and applied by Henry Ford who sought to maximize the production of cars by simplifying and speeding up the process. It is interesting to note that Vladimir Lenin was an admirer of Taylor and applied his methods to the early Soviet factories. One difference between McDonalds and Ford is that Ford had the sense to pay his workers higher wages so that they had enough money to at least buy his new cars!
At present, the confusing conditions of the COVID crunch in McDonald’s remains so bad that in parts of Chicago they reportedly have a huge shortage of workers. Instead of fast service, you have Soviet-style long queues (lines) where you have to wait ages to get served. And fast service has always been problematic in McDonald’s because there are too many customers and not enough staff to cope. Despite raising the salary from around 10 to 15 dollars an hour because of COVID-19 complications in American society currently {which is higher than the rate of an American substitute teacher who receives about 12 dollars an hour} McDonald’s still can't entice enough workers to apply for a job.
BROKEN PROMISES
In theory, McDonald’s has withdrawn from Moscow as part of the sanctions against Russia for the conflict in Ukraine. But the influence of the company lingers on in Russia. When I switched on a Russian television channel, I was intrigued to watch a film, dubbed in Russian, called 'The Founder.' It is very loosely based on the founding of McDonald’s. But anyone familiar with the founding of McDonald’s will immediately spot mistakes. First, there was not one founder but three! The company was founded by three men: Richard and Maurice McDonald and Ray Kroc. The McDonald brothers were highly successful businessmen who had opened a restaurant not long after the war and were making a lot of money. The two brothers were very innovative: they established one of the first restaurants which used drive in laundries, advertised in glowing neon signs as well as applying 'the speedee system' of delivering 'good quality food products' quickly.
Contrary to what you hear from the film 'The Founder,' the appeal of McDonald’s lay not just in 'A nice all American domestic name' but the process of delivery, tasty food and a simple menu where only three things were available: hamburgers, French fries and cola. Whatever you might think of the McDonald brothers at least they tried to observe some moral principles. When Ray suggested that they add powdered milk to milk shakes the brothers were horrified. They felt it would be fraudulent to customers.
The McDonald brothers sold the company to Ray at a low price of 2.7 million dollars. They made an agreement with the two brothers that they would receive 1 percent of Royalties a year over a handshake. Unfortunately, the brothers never signed a written contract concerning this agreement and did not receive a cent of royalties. In other words, they were cheated and their company more or less stolen from them. Ray even set up a new McDonald’s company across the road from the brothers’ restaurant and put them out of business.
When a reporter for StreetSense called McDonald’s 'McStolen' he was spot on about not only the impact but the whole legacy of the company. {See Steven Larsen's excellent article 'McStolen and McStupid' {StreetSense, July 2, 2022.}
The film suggests that compared to the marketing genius of Ray, the brothers were naive and dumb. But the two brothers warned of two things which might lead you to going out of business: Never put too many things on the menu as it can confuse customers, and don't over expand.
Both those mistakes were committed by McDonald’s during the early 21st century and many restaurants abroad actually closed down. And now they can't quite boast about offering a fast service because the stressful pace of work deters potential staff. That workers are not robots has taken a lot of time for McDonald's to fathom.
The founding brothers would be shocked at the hidden menu in some McDonald restaurants. That illicit goods such as whisky and drugs were being openly sold in a Chicago restaurant would have the brothers reeling in their graves!
IN RUSSIA
And what is the fate of the McDonalds restaurants in Russia? The most popular restaurant in the world happens to be located just off Pushkin square. The restaurants had been sold to Russian employers so that staff could keep their jobs in Moscow. They were forced to change their name and logo to continue. At the moment the logo of the company is a red circle and two orange lines. Both symbolize a hamburger and two French fries but the logos seemed shaped in the way of a subtle 'M.' The name translates as “Tasty and to the Point” {Вкусно и Точка}. Before the sanctions, McDonald’s had been in Russia for just over 30 years!
When I dropped into the restaurant just off Pushkin square yesterday, I noticed the absence of the neon signs as well as the huge 'M'. There was not even that silly McDonald Clown sitting on a chair which either humanizes or dehumanizes people—depending on your point of view. Instead, I read a sign saying, 'Something has changed but guaranteed work remains. The restaurant still had many customers but I was struck by how half empty it seemed. But I had come when more than half of Moscow had left for their dachas (summer residences) and abroad.
I was astonished at how immaculately clean the place was. Not a trace of dirt on the long spotless wooden brown tables lined with small four-legged red stools. A smartly-dressed young member of staff was still obsessively wiping the tables even when they had long been cleaned. She was dying to take away my empty tray. In contrast to Chicago, the service was incredibly quick without long queues. I was led to believe the restaurant had run out of French fries. Although I had no problem receiving French fries, cola was only available in bottles.
The company boasts 850 restaurants in 62 regions in Russia, employs 60,000 employees, and caters for an estimated 1.8 million daily guests. You can easily obtain an application form or information about available work. The company promises a monthly wage of 56,000 rubles, free food, uniforms, and stable employment.
This might sound great for some homeless people who have come to Moscow in search of work until you find out that you need to have a registered address in Moscow and particular documents. No registration - no job! And if you do get a job you'll find the era of the 1950's still haunts the workplace. Turning up at work with varnished (painted) nails is forbidden as well as other rules concerning a strict dress code. Although I don't think you'll be fired for wearing red shoes as in some offices of Russian oil companies.
Is McDonald's success down to just the name? Well, this company has changed the name and logo but business seems to be carrying on as usual. A P.R. manager, Marina whom I spoke to thinks that in contrast to many other companies, the new branding of McDonald’s won't hurt its prospects.
In fact, the case of McDonalds in Russia proves that sanctions in Russia don't work. This is especially true when you discover that the queues for the new restaurants are much shorter than the ones in Chicago! So in a sense McDonalds continues in Russia under a different name!