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13 Aug, 2010 05:10

Wendy’s push shines light on Russian quick food potential

The move by Wendy's/Arby's to push into the Russian market comes as changing fast food tastes create room for larger players.

Fast-food for a fast-paced world. The financial crisis is changing the menu of Russian diners. Many casual and fine-diners have cut their restaurant budgets – but still haven't turned away from eating out. There are currently about a dozen large fast food chains in Russia, and Uralsib Analyst, Tigran Oganesyan says there’s still a lot of room for growth.

'The sector is still underdeveloped compared to the US and fast food segment has a way to grow. In Russia overall food retail turnover is less than 5% while in the US it’s 45% – it’s huge money – around $600 billion a year.'

Most fast-food outlets are concentrated in big cities. But these markets will soon be close to saturation. In order to attract more customers, fast food chains have to expand into the regions. Opening roadside cafes is also a way to develop. Right now Russian highways are filled with independent stand-alone establishments.

As fast food sales in the US and EU are on the decline, the Wendy’s/Arby’s group says they’ve chosen the right time to conquer new horizons – and they’ve also picked up the right niche according to Aleksandr Kovaler from the Wenrus Restaurant Group.

'As part of our development we plan to open restaurants in railway stations, on highway and filling stations, and stand-alone restaurants as well as food courts. The average check is similar to the U.S., based on our research – $6-8.'

The owners say they will invest $100 million into their project and hope to have a lot of surprises for the Russian fast food diner.