Quick service restaurant chain McDonald's Corp is aiming to operate 10,000 outlets in China by 2028, on the back of a record-breaking number of new store openings last year.

The US-based company reported a 10 percent increase in global comparable sales to $25.5 billion and a 37 percent growth in net income to $8.47 billion in 2023. Its international developmental licensed markets segment, of which the Chinese market is the largest contributor in terms of newly added stores, increased 9.4 percent in 2023, results showed.

McDonald's President and CEO Chris Kempczinski said the company performed well in China last year and showed a strong growth trajectory.

The company added 925 stores last year, or 67 percent of the new stores that were opened in the international development licensed markets.

"We built 1,000 restaurants in China (an all-time high for the company in the country). So, we're very much on track from our development aspirations and we would expect to do something similar in 2024 from that standpoint," Kempczinski said.

He said the company will focus on remaining competitive, projecting continued strong comparable sales performance in the Chinese market as consumer wealth and GDP continue to grow in the mid-single digits in the country.

"We think there's going to be an opportunity for us to continue to build out development and penetration in that market to many places where we don't really have McDonald's presence. So, the overall outlook on China for us continues to be very robust, which is why we increased our stake," the CEO said.

In a strategic move to solidify its presence, McDonald's completed the acquisition of an additional 28 percent in its China operations at the end of January, taking its total ownership to 48 percent.

McDonald's operates 5,903 stores in China, of which half are in third- and fourth-tier cities. Rival KFC operates 10,296 stores in the country.

Jason Yu, general manager of market research firm Kantar Worldpanel China, said: "This number (of new stores) is still some distance away from the previous plan, especially compared to the number of stores of competitors. Therefore, reaching 10,000 stores is still ambitious."

An increasing number of price-sensitive consumer groups have chosen cheaper Chinese burger and fried chicken brands such as Wallace and Tasiting, he said. Therefore, maintaining an active stance on marketing and pricing is crucial for stimulating consumer demand and defending market share, Yu said.

Related

Go to Forum >>0 Comment(s)