Russia to get a first taste of Starbucks

Starbucks has some catching up to do when it finally enters Russia next month.

Sixteen years after the fall of the Soviet Union, Russia's biggest cities boast hundreds of Western-style restaurants, including a host of U.S. brands from McDonald's to T.G.I. Friday's and KFC.

Starbucks won't even be Russia's first coffee-shop chain.

Although Russians traditionally drank tea, they have embraced several homegrown and Western coffee chains, which now blanket Moscow and St. Petersburg and are making their way across the country's 11 time zones.

The mall near Moscow where Starbucks plans to open its first shop already has five other cafes, including the popular Russian chains Shokoladnitsa and Coffee House. Some even sell sushi and alcoholic beverages.

But Starbucks, which declined to comment for this story, is likely to stick close to the familiar menu it has rolled out with few variations in 39 other countries.

Russia is one of the most populous countries without a Starbucks. The Seattle chain, which aims to have 20,000 international stores some day, entered China eight years ago and has shops in heavily populated Indonesia, Brazil, Japan and the Philippines.

Still, no one expects the world's largest coffee-shop chain to fail in Russia.

"It's a powerhouse brand, and that will help overcome some of the hurdles that may be caused by coming in late," said Lori Daytner, the Moscow-based chief executive of Rosinter Restaurants Holding, which runs T.G.I. Friday's and other restaurants in Russia.

The country has "changed drastically in 15 years," she said. "There are very strong Russian coffee brands here, and I like to see competitors because that shows the market is still growing."

Starbucks is late partly because of a long-running legal dispute with a Moscow lawyer who claimed rights to its trademark and wanted to sell those rights back to the company. He lost that battle last year.

Like most Western chains in Russia, Starbucks has a business partner that knows the local market. Kuwait-based M.H. Alshaya already does retail business in Russia and runs Starbucks stores in the Middle East.

The first Starbucks is opening in the Mega shopping center north of Moscow. A mall developed by Sweden-based Ikea, it has a slew of U.S. food purveyors, including McDonald's, Sbarro, Baskin-Robbins and Pizza Hut.

Even if Alshaya succeeds in opening 10 stores in Moscow and St. Petersburg by the end of the year, as it has told some reporters, Starbucks will still be far behind other fast-food and coffee chains.

McDonald's, the first U.S. chain to enter Russia in 1990, has 176 restaurants, including 30 with McCafés that sell espresso drinks.

For retailers, Russia's appeal lies in the expanding wealth of its 141 million people and their willingness to spend. Many remain impoverished, but oil money has helped create a strong middle class with rubles to spare.

Last year, retail sales in Russia grew by 13 percent, and they show no signs of slowing, according to consulting firm A.T. Kearney.

Consumerism is spreading from Moscow and St. Petersburg to smaller markets where retailers like McDonald's and Ikea see lucrative possibilities.

Russians who can afford it tend to be enthusiastic shoppers, possibly because they retain a Soviet-era mindset that says, "If you see it, buy it, because you don't know if you're going to see it tomorrow," said Carol Vipperman, founder and president of the Seattle-based Foundation for Russian American Economic Cooperation.

Customers regularly buy entire rooms of furniture as displayed in Ikea stores, said Stan Laegreid, a principal at Callison, a Seattle architecture firm that works on Ikea's Mega centers in Russia.

"They say, 'That looks great, and I want it,' " he said.

In the new, market-driven Russia, retailers compete for customers and employees in ways that were unthinkable in Soviet times.

Back then, customers regularly bribed surly waiters to let them into restaurants, then paid a little extra to find out what was being served, according to people who lived in and visited the Soviet Union.

"When we opened, we were the only place with a smiling crew and open doors," said Khamzat Khasbulatov, who managed McDonald's first store in Moscow and is now president of McDonald's in Russia. "People couldn't believe we had items on the menu all the time."

After the Soviet Union collapsed in 1991, people quickly became accustomed to better selection and service.

By the mid-1990s, Vitali Mironov, who grew up in Ukraine and now lives in Seattle, was taking out-of-town guests to a Soviet-style restaurant near the Kremlin for kicks.

"You'd take the elevator to the top floor and go back to Soviet times," Mironov said. "It was very dirty-looking, and the waitress wouldn't pay attention to you."

The game was figuring out which single menu item was available that day, Mironov said. "You could only order one thing, but she wouldn't tell you which one, so you had to keep guessing."

Russia's improved economy also means that doctors, physicists and classical pianists are no longer applying for restaurant jobs to make ends meet.

The first McDonald's got 27,000 applications for 630 jobs. Daytner interviewed 400 people for 40 jobs at a Rosinter restaurant in the early 1990s.

Employees took longer to train than Western workers, because they had little experience with good service.

Daytner remembers explaining to a new waitress that it was not acceptable to seat different groups of customers together just because there was extra room at a table.

Now well-trained workers are poached by other restaurants, and chains are plagued with the same high turnover found in other countries.

Starbucks and Alshaya must know what they are up against. Next to Starbucks' green logo on the Mega mall's Web site, a link implores viewers to "Join the pleasant company."

Starbucks seeks "young and purposeful people," says the notice. It needs "barista, chief on duty and deputy manager. Who knows, maybe it's you who will come to work here?"

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

Seattle Times researcher David Turim contributed to this article.