Why Russians Pay More for Fast Food

August 13, 2011 in Daily Bulletin, Signature

Manhattan has 1.6 million people and 4,000 pizza places. Moscow has 13 million inhabitants and just 300 pizza restaurants. This explains why some believe that Russia is the next lucrative market for fast food outlets. One journalist from The New York Times decided to find out more about the nascent industry:

  • Russians have about a sixth of the income that Americans do, but because they do not have much debt, have low taxes, own mortgage free property, and have low medical bills, a greater proportion of their income is disposable and can be spent on ‘luxuries’ such as fast food.
  • Fast food chains are wise to this and have increased the prices of their products in Russia. A pizza at Papa John’s can cost 33% more than what somebody in the United States would pay
  • Papa John’s in Russia is growing at 21% a year, and its Russian properties are the most profitable among all countries in which Papa John’s operates.

Read more about why Campbell left the Russian market, and the difficulties that Russia’s weak and corrupt state infrastructure can pose for chains operating in the country over here.

Source: The New York Times