McDonald's reveals expansion plans

16 November 2009

OAK BROOK, Illinois: McDonald's, the fast-food giant, is planning to launch a number of new products and open around 1,000 outlets worldwide next year, as it aims to strengthen its position both during and after the downturn.

While many restaurant chains have seen sales levels fall since the onset of the financial crisis, McDonald's has registered an increase in traffic numbers, as diners look for cheaper ways to eat out.

Don Thompson, president of McDonald's USA, said consumers are now "much more selective. They're staying in more and spending less. Even with this newfound frugality, they have high expectations."

Over the course of 2010, the company will invest $2.4 billion (€2.1bn; £1.4bn) in further developing its global operations, with much of this funding being earmarked either for opening hundreds of new stores, or redesigning 2,300 existing ones.

Further initiatives in this period could include possibly raising prices, and adding a number of more premium items to its menus.

Peter Bensen, the Oak Brook-based organisation's chief financial officer, said these activities were "as much about changing the perception of our brand in the consumer's mind that allows us to stretch both the price and products you can serve in a re-imaged restaurant."

While McDonald's Dollar Menu has been one of the key drivers of its recent success, the quick service pioneer has also started to sell a range of more specialist coffees, and launched the Angus Burger, in 2009, backing these efforts with prominent ad campaigns.

Similarly, it is in the early stages of rolling out the Mac Snack Wrap, a tortilla version of its Big Mac hamburger, and is now offering a variety of new salads and desserts, with further plans to introduce smoothies and frappes by mid-2010.

Jim Skinner, McDonald's chief executive, argued that, as a consequence of these collective actions, the franchise-based firm would be well-positioned when the financial climate finally begins to improve.

"When you look at our performance over the last six-and-a-half years, going into 2008, before we had a declared recession, we did extraordinarily well," he said. 

"People are trading in to McDonald's, not trading down to McDonald's. We expect, because of the investment we made during the downturn, that we will come out the other end in better shape."

Data sourced from Wall Street Journal; additional content by Warc staff