Miratorg establishes Russian burger restaurant network

Miratorg opened its first restaurant under the Farsh brand in Moscow in 2015 as a joint venture with the Russian restaurant holding company Novikov Group. With this, Miratorg hoped to target better promotion of Black Angus beef from the company’s giant cluster in Bryansk Oblast, where it plans to produce 160,000 tonnes (t) of marbled beef per year, or 20% of Russia’s overall demand.

There is a high interest in the burger restaurant format in Moscow, which has already changed the local market, Novikov said in a statement posted on Miratorg’s website.

The new federal franchise program will multiply the number of Farsh restaurants in Russia, and give an additional impetus to the development of a decent fast food market in Russian provinces, said Arkady Novikov, general director of Novikov Group.

Miratorg and Novikov Group plan to open more burger restaurants in Moscow, although the local market is not as it was three years ago, according to Novikov. When the first Farsh restaurants were opened, there was a strong inflow of visitors, but soon enough other burger restaurant chains were launched in the Russian capital, which led to a fall in the flow of customers, Novikov explained.

“The others are trying to take our colours from us and this is the best evidence that this is the right time to expand the project. We guarantee maximum assistance to our partners, unique education from the Arkady Novikov’s team, uninterrupted supply of the best Black Angus beef and marketing support from one of the strongest brands​,” said Novikov.

Slow growth​

Overall sales in the Russian fast food market reached RUB510 billion ($850m) in 2018, up 3% on the previous year, according to research conducted by Euromonitor International. In 2017, the growth was 6.3% as more companies were opening new restaurants.

However, marketing campaigns by the main market players negatively affected the average profitability in the industry, added Euromonitor. The sector leaders were McDonald`s with a share of 23%, KFC with 14.2% and Burger King with 12.9%.

Further growth is still possible in the Russian provinces, where the number of fast food restaurants is still much lower than in the bigger cities.

“In terms of the development of the Russian catering market, undisputed leadership belongs to the capitals – Moscow and St. Petersburg. The attitude of eating in restaurants is developed in megacities – in the capitals and cities with a population exceeding one million – and, to a much lesser extent, in peripheral cities. This is due to the differences in income levels of the local population and the different rhythm of life,” said Dina Postolenko, executive director of the retail real estate department of Colliers International.