Supersize That Stoli, Please.

Before I talk about what McDonald's is doing in Russia, I should say that I am a fan of the company, here's a few reasons why:
1. They are and always have been profitable and have had only one quarter with a net operating loss. Not too many restaurant chains can make that claim. Probably none. The sooner Burger King is put out of its misery the better. In Texas, the only hamburger chain that shows more promise is good old Whataburger. In the northeast places like 5 Guys are doing well at copying the McDonald's methods (and they do make a good burger).
2. Until the last 5 or so years, they have always been at the front of the trends. Recently, they have been blindsided by the boomers' health trend, the low carb diet, and by the Starbucks juggernaut. That's their fault, but they have responded.
3. The food is not bad. Their new coffee is good. I actually like the Quarterpounder, and their fries are the industry standard.
4. My grandkids love the play area. In the morning for $3.00 we get pancakes, a drink and 30 minutes of fun for them. That's not too bad. Bring earplugs.
5. The stores are almost always clean and stylistically up-to-date.

But what they are doing in Russia is business remarkable. A few numbers from yesterday's WSJournal:
1. Opening a single McDonalds store in 1988 required 200 official signatures.
2. The first store in Moscow had 27,000 job applicants who had replied to an ad that ran one day in the Moscow newspaper. There were openings for 630 crew jobs.
3. On the first day of business 5,000 people stood in a line -- before they opened.
4. McD's had to build a $43 million plant in order to supply buns and burgers. The country had no existing infrastructure to supply them.
5. The average store serves 850,000 people a year. Twice the American average.
6. The largest store is 24,000 square feet. Over 5 times the American average. The Pushkin square location in Moscow has 900 seats.

Like it or not America has exported efficiency and value when it comes to food and dining. McDonald's did to food service what Holiday Inn and Howard Johnson did to the travel hotel. Americans in the 50's and 60's loved it and for good reason, and the Russians and Chinese love it now. My generation decries the loss of the personal in these massive institutions but what we forget is that the USSR in 1980, except for their military, was not much more than a 3rd world country. They were broke and failed. They could advance by conquest or start over which in a sense is what they did. I'm going to be blasted here for sounding like a Randian, suggesting that market forces turned the evil empire into a prosperous, benevolent state. I am not saying that. I simply find it ironic that places like McDonalds, Coca-Cola and Starbucks, symbol and reality of American Corporation, are so successful in countries that had what they thought was a better way.

If you get a chance read how the Canadian businessman got started in Russia. Great story. Yesterdays (10/16/2007) Wall Street Journal.