American fast-food giant McDonald’s is reported to be suing the city of Milan for €24 million after it had to relinquish its outlet in an upmarket shopping arcade, making way for a Prada store.
McDonald’s has rented a space in the city’s Galleria Vittorio Emanuele II shopping arcade for 20 years. The fast-food outlet in the 19th-century arcade is being replaced by a Prada fashion store.
The fast-food chain lost the outlet in a public tender. The ‘Financial Times’ reported that McDonald’s found the tender’s terms prevented it from renewing its lease and the company feels it has been “kicked out unfairly”.
Losing out on such a prime site will have financial repercussions for McDonald’s. The restaurant in the Galleria was the third most popular branch of McDonald’s in Italy and it is reported that the exit may cost the company €6 million a year in lost sales. To rub salt in the wound, Prada’s new store is its second in the Galleria. The fashion retailer beat Gucci and Apple to win the tender.
The marble-floored, glass-vaulted Galleria is home to various luxury stores, leading to speculation that the sight of the Golden Arches and smell of fast food may have been judged inappropriate in such a ritzy setting. Yet evidently some clientele are still loving what McDonald’s sells: on the last day the Galleria restaurant was open for business 5,000 people arrived to queue up for burgers, fries and drinks the company handed out for free.
McDonald’s set up a page on Facebook explaining to customers why it had to shut down the restaurant, which has served 40 million people over the years. The page invites people to post messages. Young and old alike have left messages recounting their memories of the restaurant and how they will miss it.