News

McDonald's expansion on track in UAE, China

August 30, 2011

McDonald's UAE is on track to hit its 100th store opening by the end of 2011, according to the Khaleej Times.

The company has spent about Dh30 million (about $8.1 million) to hit this milestone mark. Currently, there are 90 McDonald's restaurants in the United Arab Emirates region, where the company has been operating since 1994.

Since the beginning of 2011, McDonald's has opened six new outlets, costing approximately Dh2 to Dh3 million (about $550,000) each.

The chain experienced single-digit sales growth in the region throughout the first half of the year, boosted by expanded beverage offerings and a new premium Grand Chicken line.

Also during the first part of 2011, Dubai-based Neutral Fuels LLC partnered up with McDonald's to begin using recycled vegetable oil from outlets throughout the UAE to fuel the chain's delivery trucks. The company, which is a joint venture between Neutral Group and an Emirati businessman, converts the used oil into biofuel to power the trucks as early as next month.

China growth strategy 'tweaked'

McDonald's is also on track to expand its presence in China, while also renovating current stores and adding new menu items.

According to the China Daily, the chain expanded its trial franchise program last week to include local catering company, Kunming North Star Enterprise Co. Under this agreement, Kunming North Star will take over 11 existing units in Yunnan and will open new restaurants throughout the region.

Although McDonald's began franchising in China six years ago, the program is currently anemic. Before last week, just three franchisees were operating six restaurants in the country. The company is expected to accelerate its franchising component to grow its footprint in China to more than 2,000 outlets by 2013.

Simultaneously, McDonald's is renovating existing stores with a modern, bistro-like design. A new store reopened last week in Shanghai and includes free WiFi, selected music and outdoor seated. Officials expect 70 percent of the system to be remodeled in China by 2014.

Read more about franchising and growth.