Eyeing growth, McDonald's plans 1,000 new stores
Filed under: Company News, Economy, Earnings, McDonald's
Think the world has enough McDonald's (MCD) restaurants? Think again. The fast-food giant plans to open 1,000 new stores worldwide next year as part of plan to become an even more dominant force in the industry. The company also plans to remodel 2,300 existing stores, introduce new menu items and employ new technology to improve service.The efforts are part of the Oak Brook, Ill., company's "Plan to Win" strategy, CEO Jim Skinner told analysts on a conference call Thursday. McDonald's, along with other value-priced retailers such as Wal-Mart Stores (WMT), has weathered the recession well, as value-seeking consumers have ditched higher cost alternatives in search for more bang for the buck. That has helped McDonald's bottom line.
Still, sales have suffered. The company reported earlier this month that October sales rose 3.3%, driven by greater demand in Europe, Asia and Africa. In the U.S., however, sales were flat, suggesting that Americans continue to pinch pennies as unease grows about where the economy is headed. In response, McDonald's said it would begin offering a dollar menu for breakfast items beginning in January.
Speaking to analysts Thursday, Skinner said that while the worst may be behind it, the company is still operating in a difficult environment. "Like most companies, we do better when the economy is strong and consumers are confident," he said.
The company's focus during the last seven years has been "on being better, not bigger," Skinner said, allowing the company to consistently meet targets of average annual sales growth of 3% to 5% and average annual operating profit growth of 6% to 7%.
Skinner said the goals "are realistic and sustainable for a company our size and keep us focused on making the best decisions for the long term."
In addition to freshened stores and new menu items, the company said Thursday it also seeks to improve service, and plans greater use of technology "to make it easier for managers and crew to quickly and accurately serve the customer."
The company's preliminary 2010 outlook is for costs of to remain flat in the U.S. and Europe, it said. In addition, McDonald's said that currency translation is expected to benefit 2010 earnings by 10 cents to 13 cents a share based on current exchange rates. Earnings this year have been affected by currency fluctuations.
Shares of the company were lower at about 1:25 p.m. in New York, down 1.1% to $62.13 a share. McDonald's said it will release November sales results Dec. 8.
The company operates more than 32,000 restaurants in 100 countries. Among the newest are a McDonald's restaurant and McCafé in Paris's Louvre museum, slated to open by year's end. With the addition France will have 1,142 stores nationwide. Sales there have risen 11% this year.



























Reader Comments (Page 1 of 14)
11-12-2009 @ 3:52PM
patrick said...
LAST TIME I ATE MCD'S I LOST MY GUTS ON THE SIDE OF THE ROAD ......THE SMELL MAKES ME SICK ..
Reply
11-12-2009 @ 8:32PM
David said...
Interesting.
11-12-2009 @ 10:10PM
atin said...
I agree. I can not take the smell of McD. It is such a strange scent. No hamburger should smell like that? That def is not 100% beef.
11-12-2009 @ 10:29PM
Bill said...
I ate an Angus burger there a couple days ago and got sick. First time that's happened to me at McDonald's. I'm concerned about going back. I only eat there about ten times a year.
11-12-2009 @ 10:40PM
cheryl said...
I so agree with you. That is truly rot gut stuff. you couldn't pay me to eat at a McDonalds. nasty nasty nasty thats all I can say.
11-14-2009 @ 7:24PM
atin said...
I agree. I cannot take the smell of McDs. It is such a strange scent. No hamburger should smell like that? That def is not 100% beef.
11-13-2009 @ 6:52AM
Jen said...
Last time I ate at McDonalds, there was something hard in my cheeseburger and it broke my tooth! The cost to get my tooth fixed was a lot more than that stupid burger!
11-13-2009 @ 7:19AM
AP said...
That has to be an isolated case. I've never gotten sick from anything I ever ate there, and I've had access to a McDonald's since I was 10 years old. What kid of a consitution do you have that would make you do that, just from a meal from McDonald's? I wouldn't want to go anywhere for lunch with you if that's what happens...
11-13-2009 @ 11:48AM
Addison said...
All these people getting sick and making unsubstantiated product quality claims. Maybe its the flu season for wannabe food inspectors.
11-13-2009 @ 10:46AM
Donald said...
I think McDonalds is a good product!!!
11-13-2009 @ 12:44PM
processed food utopia said...
Not all McD's are created equal- it's just that some are more worse- than others.
11-13-2009 @ 10:08PM
tom said...
you meed a McWipe after barfing
11-12-2009 @ 6:15PM
Sam DiAntonio said...
Will McDonald's be the first fast food restaurant to buy the chickens from China????.
Reply
11-12-2009 @ 10:45PM
ron said...
everything we have bought from china has been bad , ifor one will not buy any product you sell that is made from tanted items from china
11-13-2009 @ 12:48PM
Dorothy said...
Yes, it is in the news!!!
11-12-2009 @ 6:18PM
Angiebaby said...
BFD. I'll be they're going to open a new McDonald's on every damn street corner in my town making it easier than ever to get a sacred Big Mac. Why? Because I can't eat them any more!!!
Well, that's okay. When my dream comes true and I live part of the time in the community of Las Vegas and I go to my home at the Casino, I'm going to eat some good food... if it kills me. Don't ask about the dream. It just is what it is.
Reply
11-12-2009 @ 6:52PM
Josh said...
Why would anyone want to eat a Big Mac, anyway? They're disgusting, and so is the "Big n' Tasty" which is neither "big" nor "tasty". Another place that I hope never sees growth is Burger King. When I opened up my Whopper I was wondering if the bun had been dropped in the toilet.
Reply
11-12-2009 @ 7:26PM
john ekiert said...
I got food for my kids and asked for an extra barbecue sauce----was told they had to charge me an extra $0.30. I will never spend another penny at a McDonald's. Thank you for saving my life. It is a small issue, but believe you me, you have lost $50 bucks per week.
Reply
11-12-2009 @ 9:19PM
Hayley said...
if you're spending $50/week on McDonald's, you and your kids have some bigger things to worry about than an extra $.30 for barbecue sauce.
11-12-2009 @ 9:37PM
davidrep1 said...
Yeah, bigger things all right... like your big fat asses from eating all those Big Macs.