McDonald's to open more than 60 restaurants in Russia in 2016

Mon Jan 25, 2016 4:48am EST
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MOSCOW (Reuters) - McDonald's (MCD.N: Quote) plans to open more than 60 restaurants in Russia in 2016, increasing the pace of expansion from last year, after its focus on local suppliers and affordable menus has proved successful in an economic crisis.

"The eating-out industry has been stagnating since the beginning of 2015 but we have seen significant growth of our market share as we continued expansion," Khamzat Khasbulatov, chief executive of McDonald's Russia, told a news conference.

He said the company had to make "serious adjustments" to its business model after sanctions and the weakening of the rouble put pressure on its margins.

"The development of local supply has played a big role in supporting our profitability," he said on Monday.

In 2016, capital spending will focus on modernization and further investment in local supply as well as new openings.

The U.S. fast-food chain, which has been present in Russia for 26 years, has steadily increased the share of local supply to 85 percent.

Khasbulatov said the company hoped to achieve full localization, helping smooth out the impact of currency swings and Russia's food import ban.

"It's important to localize not only food processing but also production," he said.

"In terms of capital allocation, Russia remains an  interesting region ... within the (McDonald's) system," he told reporters.   Continued...

A sign for U.S. fast food restaurant chain McDonald's is seen outside one of their restaurants in Sint-Pieters-Leeuw, near Brussels in this December 3, 2015, file photo.    McDonald's is expected to report Q4 earnings January 25, 2016. REUTERS/Yves Herman/Files