News
McDonald's plans aggressive China expansion
March 29, 2010
As McDonald's celebrated the opening of its Hamburger University training center in Shanghai -- the first such facility in mainland China -- the company also shared growth plans for the region. According to Financial Post, McDonald's Corp. plans to have more than 2,000 stores in mainland China by the end of 2013, with the country the primary growth engine in the Asia Pacific market.
McDonald's said in January during its quarterly earnings call that the company plans to invest about $2.4 billion in capital expenditures in 2010, including opening roughly 500 new stores in Asia Pacific, 250 in Europe and 150 in the United States. The remaining portion will go toward reimaging more than 2,000 existing locations, in Europe, Asia Pacific and the United States.
With those openings, the chain should have 1,300 stores in mainland China at the end of 2010, adding 165 over the year.
According to research from The NPD Group/CREST service, which tracks commercial foodservice usage in Canada, China, France, Germany, Italy, Japan, Spain, United Kingdom and United States, China presents a large growth opporunity. The group's data reveals that the positive economic environment in China resulted in a 3 percent increase of the total foodservice visits in fourth quarter 2009 over Q3 2009. The visit frequency grew to 8.9 per two weeks in Q4 '09. (The NPD Group began tracking consumer usage of restaurants/foodservice in China in January 2009 and will have year-over-year comparisons beginning with Q1 2010.)
The economy in China grew 8.7 percent in 2009 over 2008, and prices remained stable. Although the consumer price index had a modest increase in Q4, it fell by 0.7 percent for the year as a whole. Per capita disposable income grew by 8.8 percent, exceeding gross domestic product growth for the first time.
China's economic growth in 2009 as a whole was mainly due to government and business investment while consumers' contribution to economic growth was relatively small. In Q4, however, there were increasing indications that economic growth in China was shifting from public investment to consumer spending.
Tim Fenton, McDonald's president for Asia, Pacific, Middle East and Africa, said third party data shows China's quick-serve and casual dining industry growing to a possible $310 billion this year, according to Financial Post. In comparison, the U.S. industry will reach $460 billion, expanding at 2 percent, and in Europe it will reach $470 billion, with flat growth.
Related Media
Subscribe
Get the latest news and resources from QSR Web.
