Steps away from Red Square, hundreds of doughnut lovers lined up along a downtown Moscow street as American franchiser Krispy Kreme opened its first café in Russia this week in cooperation with a prominent local restaurateur. Krispy Kreme expects to open 40 locations in the Russian capital under a franchising deal with famed restaurateur Arkady Novikov, whose eponymous holding already runs about 50 restaurants in Russia, including some of Moscow’s highest-end dining spots. Novikov told RIA-Novosti that the initial investment in Krispy Kreme in Russia was 10 million USD (325 million Roubles. 10.8 million AUD. 10.4 million CAD. 7.5 million Euros. 6.3 million UK Pounds), with the cost of opening each café estimated at 500,000 to 700,000 USD (16.25-22.75 million Roubles. 540,000-756,000 AUD. 520,000-728,000 CAD. 380,000-532,000 Euros. 320,000-448,000 UK Pounds). He declined to specify the investors.
The 300-square-metre (3,230 square-feet) flagship café beside the historic GUM shopping mall hopes to attract local shoppers and tourists both with a classic doughnut assortment and with a chocolate-nut version conjured up especially for the Russian palate. One draw is that the doughnuts are baked at the café, right before customers’ eyes, circling around a glistening metallic conveyor in the glassed-off “doughnut theatre”. True to Moscow’s reputation as one of the world’s most-expensive cities, prices at the café are about twice those at the chain’s American shops, with a single doughnut in Moscow going for about 60 Roubles (1.85 USD. 2 AUD. 1.90 CAD. 1.40 Euros. 1.20 UK Pounds) and an assorted dozen for 480 Roubles (14.80 USD. 16 AUD. 15.30 CAD. 11.20 Euros. 9.40 UK Pounds). A large coffee costs 200 Roubles (6.20 USD. 6.70 AUD. 6.40 CAD. 4.70 Euros. 3.90 UK Pounds), 40 Roubles (1.25 USD. 1.40 AUD. 1.30 CAD. 1 Euro. 0.80 UK Pound) more than the smaller option. A large hot chocolate, likely to be in demand as the winter cold sets in, is also 200 Roubles.
North Carolina-based Krispy Kreme, founded in 1937, began its international expansion 10 years ago. On Thursday, global director Jeffrey Welch said at the crowded opening that the chain now has some 550 doughnut cafés abroad, with Russia becoming the 23rd country of presence. The café’s Moscow prices are comparable to those at rival Dunkin’ Donuts, which opened in the Russian capital in 1996, but left three years later due to a recession. The chain returned to Russia in 2010 and already has dozens of cafés in the capital. According to its website, Dunkin’ Donuts has a much bigger global presence, with some 9,000 cafés across more than 30 countries. A spokesman in Moscow said the company was opening about two new cafés each month in Russia, primarily around the capital. He noted that more than 60 percent of all chain businesses in Russia are cafés, and in Moscow, there are more than 500. However, Krispy Kreme’s Welch thinks his company has the advantage in the doughnut business, saying at the opening, “Our doughnuts are the best in the world”.
13 September 2013