The US company McDonald’s is pursuing ambitious plans. The fast food chain wants to expand its branches to 50,000 within four years. A new restaurant concept that is somewhat reminiscent of Starbucks is also being tested.
The fast food group McDonald’s has presented a new growth concept that envisages a significant expansion of the branch network. The number of restaurants is expected to increase to 50,000 by 2027. This corresponds to an increase of a good fifth. McDonald’s currently has more than 41,000 restaurants, and another 2,000 are expected to be added by the end of the current year.
A look at the past shows how ambitious the fast food giant’s plan is: it previously took the company 18 years to grow from 30,000 to 40,000 restaurants. The company, known for its burgers, spoke of an “ambitious” plan for the “fastest growth phase in the brand’s history”. McDonald’s plans to spend $2.5 billion on its expansion next year and then another $300 million to $500 million annually through 2027.
McDonald’s wants to gain more regular customers
The world’s largest fast-food chain has boosted its sales in recent years with new offerings like the McCrispy chicken sandwich. The company also benefited from the increase in online ordering as a result of the coronavirus pandemic and, most recently, from its reputation as a relatively inexpensive burger chain amid high inflation.
The business expansion that has now been announced is part of a multi-year growth plan. McDonald’s also wants to gain significantly more regular customers. McDonald’s expects them to generate system-wide sales of $45 billion by 2027. So far there are 20 billion. Overall, the new openings are expected to increase system-wide sales by 2.0 percent next year and by 2.5 percent in the years after that. The key figure includes both the stores operated by McDonald’s itself and the restaurants of independent franchisees.
Test phase for CosMc’s started
At the same time, the fast food company is experimenting with a new business idea: The company is starting a test phase of CosMc’s, a new and more beverage-focused restaurant concept, McDonald’s announced late yesterday evening in Chicago. CosMc’s focuses on lemonades, teas, mixed drinks and cold coffee. The concept of the test chain is similar to that of its competitor Starbucks.
The first CosMc’s location will open in Bolingbrook, Illinois, later this month. A handful of additional branches are planned for the coming months. The goal is to have around ten CosMc’s pilot locations in operation in the Dallas-Fort Worth and San Antonio metropolitan areas by the end of 2024. The group’s board of directors had already announced the opening of a new restaurant chain in the summer.
With CosMc’s, McDonald’s is testing a new restaurant concept.
Cautious stock market reaction
The expansion plans and the start of the CosMc’s test phase are received cautiously on the stock exchange: McDonald’s shares lost around half a percent in pre-market trading in New York in the weak consumer goods environment. Most recently, it was able to make strong gains as the market rose: since its low at the end of October at $233.40, there has been an increase of almost 15 percent.