McDonald's Class War With Milan
Upscale shopping mall cancels the lease of a down-market store to make way for something more exclusive. Mass versus class – an old story, except that in this case, it involves the politics of global capitalism, an agile turnabout by a clever marketer, and the brio of Italy. There’s a lesson here for anyone interested in how capitalism sells itself to a mass audience even during a recession.
The mall is the granddaddy of all upscale malls – Milan’s Galleria Vittorio Emanuele II. The tenant that lost its lease is the international symbol of American capitalism and globalization – McDonald’s.
Milan’s Galleria is the original Galleria, which has inspired imitators from Burbank to Buffalo. The original is breathtaking, especially after seeing the concrete-and-plastic clones. Milan’s Galleria was built in the 19th-century in the neo-classical style. It is a four-story, double arcade with a glass-and-cast-iron vaulted roof. There are inlaid mosaic floors, a glass dome in the center, and, at one end, a triumphal arch. It connects two of Italy’s great symbols of culture, the Milan Cathedral and La Scala Opera House, but the elegant Galleria is an icon on its own.
Milan’s Galleria boasts historic cafés and bars, high-end shops selling jewelry, paintings, silverware, and fashions. And for 20 years, McDonald’s. No more. The city of Milan, which owns the Galleria, sent the store packing. On Oct. 16, McDonald’s Galleria sold its last hamburger.
But McDonald’s did not go quietly. Instead, it went out with gusto and defiance. It celebrated its last day with a “democratic lunch.” As it posted on its Facebook page eforehand, “We’re waiting for you at McDonald’s in Galleria Vittorio Emanuele for a Democratic Lunch: hamburger, regular fries and a quarter-liter beverage – and it’s on us! Our historic restaurant in the Galleria is closing and we want to spend the last moments with you ☺”
McDonald’s has faced a storm of criticism over the years, both in the United States and abroad, and particularly in Italy. In fact, the opening of a McDonald’s in Rome spurred not only protests but also the creation in Italy of the International Slow Food movement, which promotes traditional cuisine and ecological responsibility. McDonald’s has been accused, among other things, of unfair labor practices, of promoting obesity, of targeting children in its advertising, of practicing cruelty to animals, and of destroying the Amazon rain forest.
And McDonald’s has fought back. In the United States it withdrew its super-sized products and added salads to the menu. Overseas, it makes a point of trying to fit into local food trends and surroundings. In 2008, for example, McDonald’s added two vegetarian restaurants in India. In Italy it received a seal of approval from the Ministry of Agriculture for its all-Italian-ingredient McItaly Burger. The democratic lunch was a natural for McDonald’s.
And, the results? Maybe it was because it was a happening. Maybe it’s because Italian unemployment is about 21 percent (34 percent for youth). Maybe it’s because they like Big Macs. Maybe it’s because they bought McDonald’s argument about democracy. Maybe it’s a matter of class consciousness. As one person wrote on MacDonald’s Italia Facebook page, “Without MC in the Galleria, we’ll no longer be able to tease those conceited people at Savini [a celebrity restaurant].”
Whatever the reason, 5,000 people lined up for McDonald’s free lunch. Most of them were young people.
McDonald’s Italia has posted photos of the event on its Facebook page, including a memory wall where people wrote comments. “I learned so many things inside here,” wrote one. “My stomach thanks you,” wrote another. “Beautiful McDonalds,” and “I <3 MC,” seemed to sum it up.
Meanwhile, McDonald’s Italia does not love Milan. They claim the closing has cost them 24 million Euros and they are threatening to sue. This is not surprising because the stakes are high.
In 2009 – the most recent year for which figures are available – the fast food industry in Italy was worth approximately $5 billion, according to Mintel, a leading market research company. McDonald’s had 22 percent of the market share by value. McDonald’s Galleria was the third busiest McDonald’s restaurant in Italy.
Mintel estimates that in today’s economy, the market is relatively flat. That makes the closing of a store in a high-traffic location like Milan’s Galleria hurt all the more.
Roberto Masi, Managing Director of McDonald’s Italia, noted that McDonald’s Galleria is being replaced by “a big firm of Italian fashion: one more place for luxury, one less for socializing within everybody’s means.”
And who is replacing McDonald’s at the Galleria? It’s Prada, one of Italy’s best-known luxury fashion brands, and beloved of celebrities. I wonder how many of them also eat at McDonald’s?