McDonald's to speed mainland outlet openings

PUBLISHED : Thursday, 26 January, 2012, 12:00am
UPDATED : Thursday, 26 January, 2012, 12:00am
 

McDonald's plans to accelerate restaurant openings on the mainland by adding up to 250 new outlets this year, driven by increased demand for hamburgers and other fast-food fare in the country.

The expansion programme would mark a new high in the number of McDonald's store openings in a year on the mainland, which is behind Japan in terms of having the largest network of restaurants established by the Illinois-based company in the Asia-Pacific region.

'In 2012, we will continue to expand services like delivery in Asia and increase our extended hours across the region,' McDonald's chief executive officer James Skinner told analysts.

Skinner said the company, which yesterday reported global revenue of US$27 billion last year, was 'extremely excited by our progress and potential' on the mainland, 'where we opened a record 200 restaurants in 2011'. He said the mainland, Japan and Australia were McDonald's three biggest markets in the Asia-Pacific region.

McDonald's goal this year is to establish between 225 and 250 new restaurants on the mainland, raising the total number of its stores in the domestic market to between 1,689 and 1,714. It had 1,464 stores on the mainland at the end of last year, compared with 3,298 in Japan.

Peter Bensen, the chief financial officer at McDonald's, said the company expected to spend about half of its US$2.9 billion in budgeted capital expenditure this year to open more than 1,300 new restaurants worldwide. The other half of that budget would be invested in the company's existing locations, including rebuilding at least 2,400 restaurants, he said.

While McDonald's remains the world's largest operator of hamburger fast-food restaurants, its expansion efforts on the mainland pale in comparison to those of Yum Brands.

Kentucky-based Yum is the leading fast-food restaurant chain on the mainland, where it has about 4,200 stores in more than 700 cities. Its brands include KFC, Pizza Hut and hotpot chain Little Sheep Group.

After a decade of strong revenue growth, the mainland's fast-food industry shows no signs of weakening. Market research publisher IbisWorld forecast the industry would generate sales of US$147 billion by 2016, up from an estimated US$74.8 billion last year.

There were nearly 2 million establishments operating in the industry last year, including franchise and chain operators of all sizes and independent Chinese-style fast-food facilities, according to IBISWorld.

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