Where Are All the Chains?
By Cameron Bellamy
As you are walking down any average Italian street, the scene is much different than what we see in Fort Collins, or most places in America for that matter. As you pass Italian storefronts you will not see many chain stores or restaurants. In America our go-to restaurants for the most part do not exist in Italy, you will not be able to get Chipotle or Taco Bell while being here. Instead, what you will see is small locally owned restaurants and businesses, you will see cafes that only have two employees that work every day, you will see a pizza shop that someone’s entire family works at, or you will see a leather store where one employee mans the store seven days a week. Other blogs have talked about the slow food culture and how taking the time to really enjoy your meal is extremely present in Italian society. In addition to the slow food culture, employees enjoy getting to know their regular customers, as once Italians find their favorite cafe or pasta place, they continue to go there forever. The fear of bringing new businesses is based around the fact that this culture could be lost and big brands will replace small cafes and restaurants.
Generally speaking, Italy and its inhabitants have been resistant to the idea of globalization. Not only are they reluctant to expand their businesses globally, but they also resist the importation of international businesses. Small businesses are the backbone of the Italian economy, with more than 50% of Italian residents working for companies comprised of fewer than 20 employees. These small businesses that the majority of residents work in are primarily service based businesses with more than 70% of working citizens employed in this field. They are your servers, baristas, and bartenders. Although many of Italy’s citizens are content with how their economy runs with a focus on small businesses and family run operations, there is constant pressure from multinational corporations to expand their operations into Italy. There are two businesses that successfully came to Italy, and can be seen everywhere just as frequently as mom and pop restaurants. Those two brands are McDonald’s and Coca Cola. There are over 500 McDonald’s in Italy with over 23,000 Italian employees. Coca Cola can be seen at every corner store, at every restaurant, and has three offices in Italy. Both of these brands originated in America and faced a tough road to be as successful in Italy as they are in the United States and in other countries. McDonalds had to adapt their menu to cater to not only their primary market of tourist but also Italians, for example they do not have the type of breakfast menu we are used to in the United States. Instead, they serve items such as Nutella Muffins, and cornettos all day. In addition to this, Italian McDonald’s also has types of coffee that we would never see in other parts of the world. They feature Italian espresso, cappuccinos, and other drinks and food items exclusive to Italy. McDonald’s even opened a special edition restaurant in Milan, Italy featuring a totally different logo and menu to appear more elegant and better suit the crowd of Milan. Many reviews of this McDonalds include words such as “Best McDonald’s ever” or “we got a lovely cappuccino”, you generally would not expect to find these reviews for a McDonalds. Similar to McDonalds, Coca Cola had to make modifications to their menu items to ensure success in Italy. Take for example one of their signature products Orange Fanta uses actual orange juice and no artificial colors. While in the United States, the same drink tastes completely different and is filled with artificial flavors. Given these two examples, it is clear that if you are a multinational company and somehow get lucky enough to globalize into the Italian market, then you must be ready to make modifications to your menu or even your ingredients. As mentioned above, McDonalds employees 23,000 Italians so you would not expect there to be so much pushback from the Italian community on Globalization in Italy.
Allowing big brands into Italy would accomplish a lot in terms of reducing unemployment and would allow Italy to collect millions of euros in tax revenue. This decision however comes at the risk of losing valuable culture. With unemployment in Italy hovering around 10%, bringing in outside companies that can provide employment to thousands of residents would bring more money into the Italian economy and help support further economic growth. The negative side to allowing these large multinational chains to infiltrate Italy is the risk that it will cause these small family run businesses that Italians cherish so much to close down. The biggest fear from Italians in regards to increased pressure of globalization is walking down these streets that I mentioned in the beginning and, instead of seeing family owned cafes, you see Starbucks (God forbid). Instead of seeing the pasta place where a whole family works, it is replaced by a fast food Americanized version of it. The argument from the side encouraging globalization is that there can be a balance: Italy can allow chains to come in without sacrificing the culture that is known and loved by so many. There has been a slow transition allowing global brands into Italy excluding Mcdonalds and Coca Cola. If you drive around Italy, you will see the occasional Burger King, the one Subway restaurant in Rome, and the three Michael Kors shopping locations in Rome. Although we can see this slow transition, the decision on whether to support globalization in Italy is not easy. The risk of damaging culture for financial gain can be hard to justify. In the coming years we will see what decision Italy makes and how it affects Italian culture and the economy.
About the Author
Cameron is a Senior at Colorado State University studying Supply Chain Management in the College of Business. He grew up moving around the United States and hopes to continue his on the move, adventurous lifestyle. He thanks Dr. Carl and Dr. Julia for their guidance and for helping our group have the best, life changing experience while in Italy. In Colorado Cameron enjoys all outdoor activities and is an avid runner and snowboarder. Following Cameron’s graduation in December he will be relocating to Tampa, Florida to begin his Master’s Degree in Investment Finance.