Activities
McDonald’s Restaurants is a wholly-owned subsidiary of McDonald’s Corporation of the USA, the largest fast-food operator in the world with in excess of 30,000 outlets in more than 119 countries. The restaurants are operated by the company, by franchisees or by affiliates.
McDonald’s serves more than 50 million customers a day worldwide, and more than 2.5 million people a day in the UK
The burger-based chain comes in a variety of formats, including sit-down restaurants, drive-thrus, counter-service outlets in food courts and even a ski-thru. More than 70% of outlets worldwide are operated by franchisees. In the UK, the group also has a limited number of McCafés.
The corporation owns a 33% stake in upmarket sandwich bar operator Prèt à Manger, which has branches in the UK, Hong Kong and USA. It also operates two other brands in the USA: Boston Market (American-style restaurants) and Chipotle Mexican Grill (Mexican-style restaurants).
Timeline
- 1948: Richard and Maurice McDonald set up the first McDonald’s self-service drive-in in San Bernardino, California.
- 1955: After gaining exclusive US franchising rights to the name, milkshake maker salesman Ray Kroc opens the first McDonald's franchised restaurant in Des Plaines, Illinois (now the McDonald’s museum). Kroc founds the company that becomes McDonald’s Corporation.
- 1960s: McDonald’s becomes a public company in 1965. In 1967, the first branches outside the USA open in Canada and Puerto Rico and 1968 brings the debut of the Big Mac, the brainchild of Pittsburgh franchisee Jim Delligati.
- 1970s: The first UK McDonald’s opens in Woolwich, London, in 1974. Restaurant manager Paul Preston later becomes chief executive officer of the UK division. In 1975 the first drive-through restaurant opens in Arizona and in 1979 the Happy Meal children’s menu is launched.
- 1986: The UK’s first drive-through McDonald’s opens in Fallowfield, Manchester.
- 1998: McDonald’s invests in the Chipotle Mexican Grill group and eventually acquires control of the brand.
- 1999: McDonald’s buys Aroma, a 36-strong chain of UK coffee shops, for £10m, but sells the remaining 26 branches in 2002 to Caffè Nero. It also buys the US-based Donatos Pizzeria and Boston Market brands.
- January 2001: McDonald’s buys a 33% stake in UK-based sandwich chain Prêt à Manger. In concert with McDonald’s Company Japan, Prêt opens 14 outlets in Japan from 2002 but the joint venture is abandoned by early 2004.
- 2002: Sluggish sales prompt McDonald’s to announce a Back to Basics plan that involves closing underperforming branches in 10 countries, job cuts, a reduced openings programme, and exiting three countries in the Middle East and Latin America. In December, the group enters a joint venture to develop a chain of Fazoli’s Italian restaurants in the USA.
- 2003: McDonald’s sells Donato’s (which has expanded to Germany) back to its founder at a loss, closes its overseas Boston Markets in Canada and Australia and, in December, dissolves its deal with Fazoli’s. A second obesity lawsuit in the USA this year is thrown out of court. In April, the UK arm adds fruit bags to its menu.
- 2004: The Salads Plus range is launched in the UK in March and a new, healthier breakfast menu in October.
- March 2006: McDonald's announces that it has closed 25 UK stores in the first three months of the year and is refranchising around 50 stores.
Operating data
McDonald’s Corporation
Financial figures for the year to 31 December 2005
Company turnover: $20.5b (2004: $19.1b) – includes company sales and fees from franchisees
Sales by company-operated restaurants: $15.4b (2004: $14.2b)
Revenue from franchised and affiliate restaurants: $5b (2004: $4.8b)
Net profit: $2.6b (2004: $2.3b)
Number of restaurants: more than 30,000 in more than 119 countries (more than 8,000 company-owned)
Number of employees: 1.5 million worldwide (398,000 company staff, 1.1 million franchisee staff)
Number of franchisees: approximately 5,400 worldwide
McDonald’s Restaurants Ltd
UK turnover to 31 December 2004: £1.6b (2003: £1.09b)
Number of UK restaurants: more than 1,250 (784 company owned, 465 franchised)
Number of UK drive-through restaurants: 735
Number of UK in-store restaurants: 519
Number of McCafés: 9
Number of UK employees: approximately 67,000, including franchisees
Number of UK franchisees: 198
Strategy
""In 2005, McDonald’s marked its third year of meaningful progress under the Plan to Win. Our customers rewarded us by visiting our
contemporary, reimaged restaurants more often to enjoy our broad range of quality menu choices along with our convenience and branded affordability.
Our performance reflects the on-going strength of our US business where we continue to leverage our convenience and build upon the successful initiatives launched over the past few years, including appealing menu additions, extended operating hours and cashless payment options.
In Europe, we increased customer traffic and posted solid comparable sales of 2.6% for the year. Strong results in France and Russia as well as improvements in Germany contributed to operating performance.
We plan to invest $1.8 billion of capital this year primarily related to opening 800 new McDonald’s restaurants and our reimaging efforts around the globe to keep the brand relevant."
Source: preliminary results statement, 8 February 2006
Chief executive
Jim Skinner
Key directors
Chief executive officer (UK): Peter Beresford
Executive vice president and chief operations officer (UK): Steve Easterbrook
Executive vice president and chief development officer (UK): Peter Richards
Vice president, finance (UK): Brian Mullins
11-59 High Road
East Finchley
London
Greater London
N2 8AW
Tel: 020 8700 7320
Fax: 020 8700 7068
E-mail:
Website: http://www.mcdonalds.co.uk
McDonald’s is the world’s largest fast-food chain and one of its best-known names – it was listed seventh in the 2004 Interbrand ranking of the world’s top 100 brands.
But its success has been checked in recent years by growing competition from smaller, nimbler rivals in the coffee bar, sandwich and gourmet burger markets, not to mention its reputation for supersizing the world’s children. In fact the group has become something of a whipping post for a host of critics ranging from nutritionists, animal welfare campaigners, anti-globalists, and unions.
Attempts to diversify were reined back in the early part of the noughties in the face of falling sales and profits. A Back to Basics plan saw the group close unprofitable stores, cut back the new openings programme, offload non-core brands outside the US, and move out of the pizza market with the sale of Donato’s stores in Germany and the US back to its founder.
The UK , which is McDonald’s third most important market after the USA and Japan, has underperformed in recent years with turnover stuck at around £1b and pre-tax profits hovering around the £118m mark.
New UK chief executive Peter Beresford acknowledges that the brand has failed to change with its customers and he is seeking to revive choice and innovation in the restaurants and develop a more upmarket appeal.
The group has introduced healthier options in response to its critics, reducing the salt and fat content of its meals and launching fruit bags, a new salad range and healthier breakfast options in its biggest menu-shake-up for 30 years.
As well as developing the brand as a breakfast destination, McDonald’s is also eyeing up the coffee market (it has opened nine McCafés in the UK to date) and the sandwich sector.
Its franchise model was praised in 2004 by The Work Foundation for helping to create jobs and wealth in some of the UK’s most deprived areas. The think-tank found that 60% of revenue stayed in the local area, equivalent to an average of £900,000 per restaurant each year.
