McDonald's strong in Germany

Eurofood, Oct 21, 1999

The German subsidiary of US hamburger giant McDonald's is confident of further growth in the year ahead which should prompt the creation of several thousand jobs. At the opening ceremony of its 1 000th German restaurant earlier this month, Gerd Raupeter, head of McDonald's Germany, said that full year turnover for 1999 should rise by at least DM400m (??204.5m) to reach DM4.2bn. Next year is expected to see the opening of approximately 85 restaurants and the creation of 3 000 - 3 500 new jobs. Asked about the possibility that the German fastfood market is approaching saturation, Raupeter said that there was still "plenty of room for growth."

McDonald's has been active in Germany since 1971 and says it is not only benefiting from a general increase in consumption outside the home, but is also finding acceptance among a wider age bracket, from its traditional core clientele of young people right through to older customers, which is facilitating the expansion of the restaurant network into residential areas. Raupeter said that, unlike other restaurant groups, McDonald's had not made the mistake of weakening its brand by over-diversifying. While the group had been quick to exploit new trends, such as the rising popularity of exotic dishes, it had resisted the temptation to expand via the introduction of burger dispensing machines, counters in other stores and other products. The proposal to set up a delivery service, for example, had been rejected because burgers could not be transported to customers without a loss of quality.

LOW STAFF TURNOVER

Raupeter also responded to enduring criticism that employee working conditions at its restaurant are substandard. He pointed out that turnover rates among its employees were below average and that all staff are hired on contracts subject to social insurance contributions payable by the employer. He said that the group's image had improved immeasurably in the course of the last few years.