McDonald's opens doors in Crimea - Brief Article

Eurofood, Feb 3, 2000

The first McDonald's franchise in the Crimea has opened for business in the city of Simferopol, making it the 35th McDonald's restaurant operating in Ukraine. The outlet boasts a McDrive Thru and a special room for children's parties and functions. McDonald's has earmarked US$100m (?? 100m) for its Ukraine operations and has already invested US$ 60m of this. By the end of 2000 the company plans to have 50 restaurants operating in Ukraine and to increase that number to 85 by the end of 2004.

Also, since the beginning of May 1997, when McDonald's first opened its doors in Ukraine, it has been employing close to 2 000 people working in its restaurants and almost 4 000 new jobs have been created in the company's restaurant servicing infrastructure. McDonald's has already served over 25 million customers. More than 35% of all the food items and other products sold by the restaurant chain are produced in Ukraine, and McDonald's forecasts that local production will account for 90% by 2004.

BIG MAC SOON TO HIT PAGO PAGO

Meanwhile, the fastfood giant is to extend its coverage to the last remaining burger-free patch of US territory and open doors at a new restaurant on the Pacific island of Tutuila, which forms part of the American Samoa island group. It is not yet known when the outlet will be ready to serve its first customers, but it will be situated in Pago Pago, the island's capital. Differences of opinion among investors have slowed down the progress of the project, but the local McDonald's franchise holder, Agaoleatu Charlie Tautolo, said that he was making headway.

OPPORTUNIST APPROACH

Closer to home, McDonalds' vice chairman Jim Cantalupo said the group, which has relied on the impetus of its US and European activities to make up for economic crisis in Latin America and Asia, is confident of an improvement in the latter difficult areas. Restructuring of the US mother ship is also expected to bring cost benefits. "Our globally branded competitors have certainly not weathered the storm like we have," he added. Chairman and CEO Jack Greenberg agreed, saying the group had acted the opportunist in the face of market difficulties, picking up real estate when prices were low and revelling in market share improvements as competitors were squeezed out of the market.