McDonalds set to open 200 restaurants as it counts on expansion to fuel growth

Susannah Streeter, head of money and markets, Hargreaves Lansdown: “Expansion is on the menu for McDonalds, as it eyes fresh opportunities amid squeezed consumer budgets. Opening new restaurants to lure in new customers, rather than relying on people ordering more frequently from existing outlets, appears to be its recipe for success. On a like-for-like basis, sales were down 1% at the half year mark, showing just how tough it is has been to persuade customer to spend more at their local fast-food joints. It’s investing in putting more value offerings in the mix, but despite its huge scale it’s still facing some challenging trading conditions.

The company has already flagged that it expected new openings to make a 2% contribution to restaurant takings by the end of the year and it’s clearly set on accelerating that strategy in the years to come. The bias in openings towards franchised operations should help margins once the stores are opening at full throttle. Expect investment too in online services, deliveries and drive thrus, as consumers are still demanding an even more efficient and convenient operation from this giant in the fast-food world.”