¿Por que quebró McDonald’s en Bolivia?

December 20, 2011 1:58 PM

Why did McDonald's fail in Bolivia?
posted by Tom-B (38 comments total)

Knee-jerk response: Because Bolivians like good food?
posted by caphector at 2:00 PM on December 20, 2011 [2 favorites]

Why guess? Ask owners why they are closing.
posted by Postroad at 2:01 PM on December 20, 2011

Because Bolivians like good food?
posted by cmoj at 2:02 PM on December 20, 2011 [5 favorites]

I donno but other nations should clearly replicate this Bolivian success story.
posted by jeffburdges at 2:04 PM on December 20, 2011 [10 favorites]

Eh, Indonesians like good food, and McD's was going strong (in non-tourist areas) when I was last there. Mind you, in the sweltering heat, they had a line and register strictly for the purpose of buying soft ice cream, so maybe that's what kept them afloat.
posted by Durn Bronzefist at 2:05 PM on December 20, 2011 [2 favorites]

"It was very hard to get used to McDonald's, it's like another planet," said Miriam Torres, a kindergarten teacher who saved up for one week to take her two sons to celebrate one final birthday with Ronald McDonald.

Guessing this is why.
posted by Burhanistan at 2:06 PM on December 20, 2011 [8 favorites]

"I grew up with McDonald's, I celebrated my birthdays in McDonald's, I even wanted to work at McDonald's," he said. "I feel deceived, and most of all sad."

Not such an alien sentiment when people equate multinationals = prosperity|progress = success|happiness
posted by Foci for Analysis at 2:06 PM on December 20, 2011 [2 favorites]

Because even a cheap fast food meal is too expensive for most people in the poorest countrt in South America?
posted by riruro at 2:06 PM on December 20, 2011 [3 favorites]

From the last link, which appears to be a copy of a CNN report from 2002: McDonald's served its last hamburgers in Bolivia Saturday at midnight, after announcing a global restructuring plan in which it would close its doors in seven countries with poor profit margins.
posted by vidur at 2:06 PM on December 20, 2011

> Eh, Indonesians like good food, and McD's was going strong (in non-tourist areas) when I was last there.

And they get grass fed Australian halal beef. McDonald's burgers taste pretty good in Indonesia.
posted by Burhanistan at 2:07 PM on December 20, 2011 [6 favorites]

The last link, a CNN piece from 2002, says it all, and then some:

Most Bolivians said they were sad to see McDonald's go, after they had finally become accustomed to the fast-food culture so radically different from their traditional Bolivian cuisine.

"It was very hard to get used to McDonald's, it's like another planet," said Miriam Torres, a kindergarten teacher who saved up for one week to take her two sons to celebrate one final birthday with Ronald McDonald.

Torres, like many other Bolivians, said she felt somewhat betrayed that McDonald's would give up on Bolivia after being here for such a short period of time. McDonald's brought fast-food culture to Bolivia seven years ago.

In summary: 1) the experience was awkward and foreign, and 2) it cost a lot more than other food options, but 3) it was exciting when you could afford it. But don't worry, Bolivians still have Burger King.
posted by filthy light thief at 2:07 PM on December 20, 2011

man that iea piece stank to high heaven. wow.
posted by facetious at 2:09 PM on December 20, 2011 [3 favorites]

Not sure if mefi post going so-so, or askme post going really well...
posted by mediated self at 2:11 PM on December 20, 2011

I agree. Contrary to the informative CNN piece, the Institute of Economic Affairs link is (the "fail" link in the OP) is sad in its lack of effort. It's as if someone saw the fact that there's a documentary celebrating McDonalds failing in a country, and wrote from that alone. Any attempt to learn about the subject would have made for an informed discussion. Instead: "Why do people hate globalization? How is food from an international chain not the same as food from a local street vendor? Capitalism = Capitalism, qualifiers be damned!"
posted by filthy light thief at 2:12 PM on December 20, 2011 [1 favorite]

the experience was awkward and foreign

Unlike in neighboring Paraguay, which has 6 of them? Still doesn't answer the question of what makes Bolivia different. It would be interesting to have a South American's perspective on this.
posted by crapmatic at 2:13 PM on December 20, 2011

From a BBC report in 2002:

In a country where average earnings are less than £50 per month, the number of people willing to spend more than £2 on a burger and chips was always going to be limited.

"In other countries like England or the US McDonald's is a cheap option, but here you can buy a burger for two Bolivianos (£0.17; $0.27)," said Edson Ribero, chef at a local fast-food chain that sells pizzas and steak sandwiches for less than £1.

"This is why McDonald's failed. It was not competitive in the market."

It doesn't look like the failure was much of a mystery. Capitalism in action.
posted by vidur at 2:18 PM on December 20, 2011 [4 favorites]

In filthy's link:

POLLOS CHRISS
POLLOS CHUY
POLLOS PANCHOPOLLO
POLLOS PANCHITA
POLLOS JA JA JA
POLLOS ROKY

I don't think KFC is going to break the market anytime soon.
posted by RobotVoodooPower at 2:18 PM on December 20, 2011

It's as if someone saw the fact that there's a documentary celebrating McDonalds failing in a country, and wrote from that alone.

Well, yeah. The IEA article seems to be about the documentary, not the failure of the McDonalds venture. It appears the documentary is a more recent work than the event of McDonalds leaving Bolivia, which is kind of old news, and not particularly mysterious.
posted by 2N2222 at 2:24 PM on December 20, 2011 [1 favorite]

POLLOS JA JA JA translates to "HA! HA! HA! Chickens!!!!".

In other words, is has the best restaurant name ever.
posted by sideshow at 2:37 PM on December 20, 2011 [16 favorites]

POLLOS JA JA JA translates to "HA! HA! HA! Chickens!!!!".

In other words, is has the best restaurant name ever.

The commercials need Gob.
posted by Durn Bronzefist at 2:39 PM on December 20, 2011 [2 favorites]

I read a leaked internal report from McDonald's corporate, suggesting that the problem was mostly related to restroom hygiene, specifically with aggressive infestations of local amphibians who sought the dank environments for shelter. You can probably google it, I'm pretty sure it was titled "Bolivia: Newts in John".
posted by cortex at 2:45 PM on December 20, 2011 [18 favorites]

HAHAHA CHICKENS WE ARE EATING YOU NOW!
posted by straight at 2:51 PM on December 20, 2011

groan
posted by Meatbomb at 2:52 PM on December 20, 2011

cortex we expected better/worse of you
posted by DoctorFedora at 3:00 PM on December 20, 2011

Can we send all the McDonalds haters to Bolivia now?
posted by srboisvert at 3:01 PM on December 20, 2011 [2 favorites]

McDonald's also withdrew from Iceland after the country's economic collapse.
posted by reiichiroh at 3:10 PM on December 20, 2011

No Big Mac Index for Bolivia, then. Which incidentally shows that hamburgers are more expensive in Argentina, Brazil and Colombia than in the US, and that's even without adjusting for purchasing power. So either the dollar is seriously undervalued or the index is completely stupid.

Interestingly, McDonalds has been reported elsewhere to make a loss for 23 of 25 years in my country. The main company keeps on giving loans to the local branch although it almost never shows profit. I guess they're trying to outplay the smaller local companies by weight and still haven't admitted that the strategy really isn't working.

(Our local McD franchises are typically profitable though. If they weren't, they would disappear more quickly. I think that's what happened in Bolivia.)
posted by ikalliom at 3:16 PM on December 20, 2011

They didn't make it in Barbados either. Though KFC is doing fine.
posted by Jode at 3:17 PM on December 20, 2011

Bolivia 1, Rest of the world 0.
posted by hal_c_on at 3:40 PM on December 20, 2011

McDonald's didn't get to the place it is today because they make the best hamburgers. They have a business formula whether it is Bolivia or anywhere else. They left because the margins were poor. They didn't get the amount of traffic for their food that they needed to keep the stores open. They needed a large enough base of middle- and upper-class people to stop by the stores. And even though there are middle- and upper-class Bolivians there weren't enough of them that wanted to eat a McDonalds enough to support it. In some countries with few or no McDonalds, KFC and Burger King fill in the gap for American-style fast food. It may not be so much the local population likes one brand of American fast food over another, it probably has to do with the operating costs being lower. Of course, the brands also have to make some changes to their menu for the local tastes. But I don't think they want to go to the extreme of having the super-low-cost food you can buy on the street.

But I think the real reason they didn't do well in Bolivia is because they didn't have McRib there.
posted by birdherder at 3:44 PM on December 20, 2011 [3 favorites]

Clearly the industrial flavourings don't work above 10000 feet.
posted by Pruitt-Igoe at 4:34 PM on December 20, 2011 [2 favorites]

McDonald's, it's a hell of a drug.
posted by telstar at 4:52 PM on December 20, 2011

Eh, Indonesians like good food, and McD's was going strong (in non-tourist areas) when I was last there.

And they get grass fed Australian halal beef. McDonald's burgers taste pretty good in Indonesia.
posted by Burhanistan at 2:07 PM on December 20 [6 favorites +] [!]

Well, perhaps not for much longer, as Indonesia is seeking to be self sufficient in beef in a few years, assuming that the quota reduction for Australian cattle next year isn't just payback for the Australian government freezing exports earlier in the year on animal cruelty issues.
posted by Hello, I'm David McGahan at 6:25 PM on December 20, 2011

Clearly we need to cut down more rainforests to supply McDonald's with cheap beef.
posted by sneebler at 6:29 PM on December 20, 2011

McDonald's also shut down a large number of branches in the UK. Both high streets I have lived near have had their McDonald's close as McDonalds UK has chosen to focus their efforts on specific branches. Strangely both of the closed branches seemed pretty popular and well situated to me though I would say the quality control wasn't always what you expect from a McDonalds.
posted by srboisvert at 12:33 AM on December 21, 2011

ikalliom: "No Big Mac Index for Bolivia, then. Which incidentally shows that hamburgers are more expensive in Argentina, Brazil and Colombia than in the US, and that's even without adjusting for purchasing power. So either the dollar is seriously undervalued or the index is completely stupid."

The Economist always publishes a disclaimer with the Index that local factors like regulation, taxes, and transportation can distort what's going on. Like any currency index, what's most important is the trend.
posted by Chrysostom at 6:38 AM on December 21, 2011

Agreed. What's distorting it most for South America however is that a hamburger is not just a hamburger, which is the basic premise of the index. The demographic which can afford to eat (and do) in the local McDonald's is completely different in Brazil and in the US, for example. Adjusting for average purchasing power assumes they are somewhat similar, which they most certainly are not. But I'm sure that the people in the Economist know this, too.
posted by ikalliom at 10:06 AM on December 21, 2011

The second link in the original post has a good analysis in the comment field.

A Bolivian basically sums up McDonald's departure in terms of the facts that they didn't use local suppliers which could have brought down costs, Bolivian people tend to take lunch at home so fast food wasn't a good cultural match, local burgers and fries cost 10% of what McDonald's charged, McDonalds paid poorly so people didn't like working there, and McDonald's didn't exhibit enough corporate social responsibility to expect much more support than they received.

Pretty straightforward.

If one wants to take the tract that this is a symptom of the American empire falling, I think there is some merit to that discussion too. McDonald's and other American brands were thought to be so seductive 30 years ago that they could bend entire societies. At that time, McDonald's in Moscow was a huge story. Today the arrival of McDonald's in a country is just the arrival of another food vendor.
posted by Intrepid at 12:39 PM on December 21, 2011 [1 favorite]