Dragoš Pavićević, CEO of McDonald's in Serbia - We will invest over 2m EUR in 2010

Dragoš Pavićević

The investment that is required for the opening of a McDonald’s restaurant ranges between 1.5 and 1.8m EUR. That is exactly how much company McDonald’s Serbia will invest in the equipping and furnishing of the new restaurant on Belgrade-Niš highway, of which opening is expected in mid-2010. The firm will also change the interior of two existing restaurants and open three new McCaffes. Dragoš Pavićević, the CEO of McDonald's in Serbia, speaks in the interview for eKapija about the effects of the global crisis on the market of "fast food" industry in Serbia and how many people in 2010 will get the chance to work for the company.

McDonald’s Serbia currently owns 14 restaurants, 11 of which are in Belgrade, one is in Subotica, one in Niš and one in Novi Sad. What are the company's plans for market expansion in 2010?

- This year we plan to open at least one more restaurant. The preparation works have already started on the project for the facility that will be opened on Belgrade-Niš highway, in the vicinity of Velika Plana. We are also trying to provide one more location, but we will keep that secret for now. We plan to have two restaurants "remodelled" - the interior of the restaurant in Belgrade's Block 44 in Trade center Piramida and the restaurant in Novi Sad will be completely changed soon.

You opened the first McCaffe in Serbia in 2008. Do you plan to open some new facilities of the kind soon?

- Opening of four new McCaffes is in the pipeline, so that we should end this year with 6 or 7 such coffee shops. The first McCaffe outside Belgrade will be opened in Novi Sad.

How big are the required investments?

- Between 1.5 and 1.8m EUR are needed for opening a new McDonald’s restaurant, while the opening of a McCaffe requires between 150,000 and 200,000 EUR.

Are you successful with the results of the McCaffe concept in our country?

- Serbia is famous as an area where lot of coffee is drank. Here the life without coffee is quite empty. She is more than just a hot drink. Coffee gives some magic to the life, so that we find that part of the business very interesting as a supplement to the offer of existing McDonald’s restaurants. We are satisfied with the results for now. However, it is important to point out McCaffe is not going to be our core business. We will primarily stay in the "hamburger business".

Economic analysts agree that the time of financial crisis is suitable for the boom of "fast food" industry. Are there any changes in your operations?

- At the time of the crisis people give up some things that they could afford before the crisis. That trend of growth of "fast food" industry is more visible in Western Europe, maybe because they are at bit higher level of economic development than us. McDonald’s in Serbia has never been in the sphere of cheap restaurants, which is usually the first thing you think about when fast food is mentioned. We have always put quality and safety of these products to the first place. And if you want something quality and safe, then you must pay the price...

Concerning the fact that McDonald’s in Serbia is not the in the group of cheap restaurants like in the majority of European cities, does that mean that the quality of our McDonald’s restaurants is higher?

- It is difficult to say that because I can not draw the line between higher and lower quality. What is for sure, according to our researches, is that we take that business much more seriously and many friends and partners who have nothing to do with our company see McDonald’s in Serbia as the place that is much different from similar restaurants in Europe. Certain team of people stand behind all that and give their contribution by working with great affection, enthusiasm and knowledge. Because, in the end, the key to each business lies in people.

How many people do you plan to employ in 2010?

- Opening of each new restaurant creates between 50 and 60 jobs. We currently have 750 employees. We did not cut that number even in 2009, the year of the crisis.

You closed several restaurants in Serbian provinces in early 2000. Is the difference between the operations in Belgrade and other cities now smaller?

- Unfortunately, that is still one of the problems of Serbian economy. Belgrade and Novi Sad are on the top of the list, and nearly none of the cities can keep up with them. You can feel the difference in the operations, but the picture is not black-and-white. We closed several restaurants in early 2000, but that was really difficult time for the whole economy of Serbia. Generally, when you invest money, you expect investment return. Mistakes are made only by those who work. We probably made few mistakes and had to eliminate them. The only possible solution at the time was to close the restaurants, which does not mean that we won't return to these cities in few years.