McCrisis profitable for fast-food chains

The crisis has caused many things to shrink - GDP and salaries are just two of them - but despite the economic gloom some things are continuing to expand, most noticeably fast-food chains and consequently, waistlines.

Quick service restaurants, as they often prefer to be known, such as McDonald's and leading Russian chains, have shown considerable resilience during the crisis, with many people abandoning more expensive eateries in favour of budget, less healthy options.

"People really are buying more fast food, but only those people who can do this," said Sergei Lapada, marketing director for Stardogs. "A really big segment of our customers are low-budget oriented - and they're buying less."

Stardogs sales fell slightly in January and February, though this was partly due to the seasonal effect of fewer people willing to eat street food in winter. The company reported a 30 per cent increase in sales from 2007 to 2008 and as a result, plans to open more locations.

"People are buying less if we look at average sales from one kiosk, but there is huge potential for development in the changed market environment," said Lapada.

McDonald's, the world's biggest fast-food corporation, has also announced plans to open 40 more restaurants in Russia this year, saying that the crisis has not affected their investments.

"We are very optimistic about our future here," said Svetlana Polyakova, a spokesperson for McDonald's. "We are attracting 800,000 customers a day but we hope to serve more."

However, even the robust fast-food industry could suffer if the crisis is prolonged for more than a year, with people looking for even cheaper options.

"Quick service restaurants tend to be the net beneficiary of the decrease in demand in the short to mid-term as the ‘eating out' culture is quite strong in Russia," said Nick Hluzsko, general director of Rostik's KFC. "Of course, if the crisis continues much beyond say 12 to 18 months, people will simply revert to home cooking."

The increase in fast food consumption, in addition to people moving to lower priced and lower quality produce, has prompted concerns among nutritionists.

Russia's chief doctor has even recommended an "anti-crisis diet" that can allow people to live healthily on 2,780 roubles a month. Unsur­prisingly, it does not include fast food - but nutritionists are also warning against anything high in fat, such as sausages and confectionery.

"Fast food threatens the world by fatty degeneration," said Alexander Baturin, deputy director of the Institute of Nutrition at the Russian Academy of Medical Science. "The problem is not just in fast food, but in people's ignorance [about good dietary habits] and inability to ration it correctly. It's not bad to eat a hamburger, but it's bad when fast food becomes a way of life."

He recommended eating more fruit and vegetables, which are both healthier and cheaper than meat.

"In my opinion, the consumption of dishes and products prepared at home should increase," said Baturin. "I believe the developing economic crisis should be considered as motivation for a transition to a healthier diet."

Historically, evidence that recessions lead to healthier eating is thin, however.

In his classic account of the 1930s Depression, "The Road to Wigan Pier", George Orwell rejected as sanctimonious nonsense lectures to unemployed coal miners in northern England that they should eat more wholesome, boring food:

"When you are unemployed, which is to say when you are underfed, harassed, bored, and miserable, you don't want to eat dull wholesome food. You want something a little bit 'tasty'. There is always some cheaply pleasant thing to tempt you. Let's have three pennorth of chips! Run out and buy us a twopenny ice-cream! Put the kettle on and we'll all have a nice cup of tea!"

 In Russia, despite the criticisms from nutritionists, fast-food chains have sought to play down the idea that it should be considered an unhealthy option.

 "Fast food is not really a bad diet," said Lapada. "Everybody should understand that fast food is special-purpose food for those who want fast, reliable and tasty food with a high nutritional value. It's for those who work hard and expend a lot of energy."

When asked if the expansion of McDonald's was contributing to a decrease in the quality of Russians' diet, Polyakova disagreed, saying that in the last 20 years the company has introduced an expanded menu, including a number of salads.

"There are a variety of healthy options as part of a balanced diet at McDonald's," she said.

Ed Bentley

Moscow News