McDonald's in Italy
It was the mid-80's when McDonald's opened its first restaurant in Rome, taking the spot of a very prestigious bar, right off the Spanish Steps, across from the Spanish Embassy and right next to Valentino's headquarters. It was a drastic move. While McDonald's had ample experience moving into new markets, Italy was especially difficult. The demanding clientele and the quality of ingredients used within the country, made a lot of fast food unpopular. Despite these issues, as well as the presence of Italy's own burger chain, Burghy, McDonald's decided to try an Italian adventure. The opening was huge, so big that teenagers nearly stormed the restaurant, stopping traffic and causing havoc in the streets. To stop the mania, officials decreed that McDonald's would have to be closed at certain times until further notice. This was McDonald's first problem and wouldn't be their last.
As we said, Rome's first McDonald's was located across from the Spanish Embassy and only a few doors down from Valentino's atelier. It wasn't long before the designer sued the chain, maintaining the smell of their fries was ruining his clothes. A long battle ensued, which resulted in McDonald's fixing venting and airflow. It seemed McDonald's was doomed in Italy, but that was far from true. The fast food giant had more then enough cash flow to sustain them through the tough times, and soon they were opening a second restaurant in the neighborhood of E.U.R. This was more American in its layout and a place where families could gather. For a long time only a few McDonald's operated in Italy, which seemed strange for a fast food chain found on nearly every street corner the world over. The truth was that McDonald's had a plan, one that neither the Italian public nor the government seemed aware of. McDonald's patiently waited until the timing was right and then, seemingly overnight, opened franchises all over the country.
In order to expand in the Italian market McDonald's did what made sense--they bought out their competitor, Burghy, a chain that belonged to Italy's largest meat producer, Cremonini. The deal was sweet for both sides: McDonald's took over all Burghy restaurants and in exchange Cremonini became the sole meat supplier for McDonald's in Italy and parts of Europe, a deal that is still very much alive. It's safe to say that both sides made a fortune. In a very short period of time, the Golden Arches replaced the Burghy logo and it was left up to McDonald's to satisfy millions of new customers not really used to eating burgers and fries.
Turning the young into McDonald's fans was easy, but convincing older generations was quite difficult. To win over parents, McDonald's introduced healthier food options like salad and pasta bars. The concept flew and in a heartbeat McDonald's entered the Italian lifestyle for good.
A further increase in market share occured through a business agreement with Italian oil giant Agip. This agreement allowed the opening of many more restaurants in Agip gas stations, giving those on the road a one-stop shop-and-gas option. This was a totally new concept for Italians who were suddenly introduced to a very American concept: the drive-thru. While still not as popular in Italy as it is in North America, the Agip drive-thrus remain.
The final step in McDonald's Italian takover was to introduce franchising, moving away from a controlled corporate environment. Franchising led private citizens and small businesses to invest and to spread the chain. The number of McDonald's currently open in Italy today would have been unthinkable even in the 90s. Even better for McDonald's they remain one of the few chains that have managed to be successful in Italy, at least in this magnitude. Others have tried and failed while Burger King has a much smaller market share. To gain more customers McDonald's recently embraced a careful campaign of providing good, healthy food based on Italian products and ingredients, moving away from their greasy, fast food image.
The success of McDonald's proves that, despite political and social adversity, the brand is able to thrive in new countries. Italians have embraced McDonald's as have the tourists who appear happy to find one on every corner. What really stuns is how quickly Italy came to be dominated by the Golden Arches, which can now be seen gleaming next to historical landmarks like the Pantheon.