McDonald's expanding aggressively - Brief Article

Eurofood, August 31, 2000

US-based fast-food restaurant chain McDonald's is accelerating its rate of expansion throughout Europe and South Asia. This news comes on the back of a company announcement that the group's sales have passed the US$10bn (11bn [European Dollar]) mark in a quarter for the first time. At a constant exchange rate, McDonald's sales grew by 5% in the second quarter of the year on the back of a 7% rise in the first quarter, generating sales of US$19.7bn for the first six months of fiscal 2000. The operating profit of US$1.6bn represents a 3% increase on the 1999 figures.

These sales increases can be partly explained through its vast empire of restaurants across Europe, with 1 044 outlets in Germany, 901 in the UK, with 812 and 257 restaurants in France and Italy respectively. It can also be explained by the aggressive expansionist policies McDonald's demonstrated by the fast-food giant in opening some 546 new outlets since the start of the year. McDonald's says that this rapid expansion will continue on a global scale for the rest of the year.

80% OF SALES FROM EUROPE AND THE US

Jack M Greenwood, CEO of McDonald's, expects the company's growth to continue and claimed that sales were hit by the Euro 2000 football championships in Holland and Belgium during June and July. McDonald's generates over 80% of its profits in Europe and the US, however it hopes sales will improve in Asia and Latin America. In Europe the sales are up 8% aided by solid sales in France, Italy, Spain and Russia.