McDonald's Isn't Immune To Soviet Price Increases
Apr. 09, 1991
MOSCOW (AP) _ Big Macs now are taking even a bigger bite out of Soviet budgets: McDonald's has raised its prices for the second time since opening in January 1990.
''We don't expect to see much of a decrease'' in the number of customers, said Glen Steeves, operations manager for the Canadian-Soviet owned fast food establishment. The restaurant, the largest McDonald's in the world, serves from 45,000 to 50,000 people daily.
''The line decreased yesterday, but the number of customers didn't,'' he said. Last week, lunch at McDonald's often involved a two-hour wait. On Tuesday, the wait was 10 minutes.
The McDonald's in Moscow raised its prices by an average of 35 percent Monday, six days after the Soviet government boosted the tab on food and other consumer goods by from 250 percent to 1,000 percent.
A Big Mac, which had cost seven rubles 10 kopecks, went up to nine rubles 45 kopecks. French fries jumped from one ruble 57 kopecks an order to two rubles 95 kopecks.
But while patrons were paying more, there was good news for McDonald's employees - the restaurant increased its employees' monthly salaries from 500 rubles ($850 at the official exchange rate) to 800 rubles ($1,360). The average Soviet earns 330 rubles a month.
''The cost of living has increased substantially here,'' Steeves said. ''We want to make sure our employees are able to enjoy a comfortable way of living.''
Steeves said the price increases were necessary because of higher costs. ''In the last two months, wheat, flour, milk and eggs have gone up from 150 to 200 percent,'' he said.
''We are committed to sourcing all our products from the Soviet market, and as costs go up, some (of the difference) has to be transferred to the consumer,'' he said.
One McDonald's patron, Alexandra Kirillova, 66, spent five rubles five kopecks for a cheeseburger that last week cost only three rubles 25. She was waiting to have a cup of tea when she got home because she couldn't afford the added expense of drinking at McDonald's.
''Of course it's expensive here,'' she said. ''I stood in line today to buy circus tickets for my grandson and then decided I wanted a burger. I gave the cashier three rubles and they told me; 'Three rubles, no 3/8 Everything's gone up.'''
Andrei Ivanov, 33, sipped a cold drink, and thought before commenting. ''For me, McDonald's is relatively inexpensive. ... But there's nowhere in Moscow you can find a (quick) place to eat for this price.''
The Kim family obviously agrees. They just spent 120 rubles on lunch for four.
''We don't come here often, it's too expensive'' said Natasha Kim, an economist and mother of two children. ''But today we're meeting relatives.''
Pete Cosmetatos of Athens, who is in Moscow on a Russian language program, is a frequent McDonald's patron.
''I just paid 60 rubles for all this,'' he says, pointing to his plastic tray loaded with two chocolate shakes, one Coke, one Fanta, one tea, five french fries, two Big Macs and two hamburgers.
''On the black market rate, that comes to less than $2,'' he said, referring to the complicated system of Soviet exchange rates. Although the official rate is $1.70 per ruble, tourists may exchange $1 for 27 rubles. The Soviet currency is not traded freely on the world market.