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Russia's pain is McDonald's gain

Monday, January 25, 2016 - 01:34

Russia's economy contracted by 3.7 percent in 2015, according to the country's statistics service but one U.S. giant is cashing in on the hard times. As Sara Hemrajani reports, McDonalds is expanding thanks to the success of their affordable menu.

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More Big Macs in Russia. McDonald's says it's expanding its reach - opening at least 60 restaurants across the country this year. While Russians are curbing their spending, the affordable menus at the Golden Arches are proving to be successful. The CEO of McDonald's Russia. (SOUNDBITE) (Russian) KHAMZAT KHASBULATOV, CHIEF EXECUTIVE OF MCDONALD'S RUSSIA, SAYING: "We know that purchasing power of the population will continue to decrease but we ensure that our menu remains affordable and this will remain our priority in 2016." And a Happy Meal may be what the public is looking for after another dose of bad economic data. New figures reveal that Russia's GDP shrank by 3.7 percent in 2015. Retail sales, capital investment and real wages all took a hit, dropping by significant amounts. The main cause for this pain - sliding oil prices. The commodity is Russia's main export, which means the plummeting price of crude is making a huge hole in government revenues. Adding to the strain, ongoing sanctions imposed on Moscow following the annexation of Ukraine's Crimea region in 2014. Residents in the capital are pessimistic, saying they aren't expecting the recession to end anytime soon. (SOUNDBITE) (Russian) MOSCOW RESIDENT, SERGEI, SAYING: "I have to save money, avoid expensive purchases, buy less expensive things, buy less food, save up on leisure activities. This is very serious, because salaries are not growing. And life has deteriorated compared to two years ago." As the Kremlin tries to weather the economic crisis, many will be hoping McDonald's increased investment drive will create jobs and new business opportunities.

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Russia's pain is McDonald's gain

Monday, January 25, 2016 - 01:34