McDonald's Corporation recently filed their annual 10-K report for 2013 disclosing that
the company opened 225 new restaurants in the United States during the past year and
plans to open 250 new domestic locations in 2014.
However, the stated total number of restaurants in the USA increased by only 121 stores
due to closings. Two hundred and twenty five new locations sounds excessive in a nation
already saturated with McDonald's stores.
But is 121 too many new openings?
During the years 2005 through 2012 the number of total locations in the USA grew at an
average of 60 stores per year. This must be one of the reasons those were good years,
there was little cannibalization of the existing restaurant base.
Is it just coincidental that the year McDonald's accelerates that growth is the year same
store sales increases came to a grinding halt? There are certainly many factors influencing
sales trends and only McDonald's Operators in the field can judge the impact of new store openings.
But we do know one thing, mentioning new store numbers (225 in 2013 and 250 in 2014)
is an effort to convince shareholders that McDonald's is still a growth company. While McDonald's management often discusses new store growth in other segments of the globe
it's been more than a decade since management has willingly discussed restaurant growth
in the USA.
This is likely a hangover from the disastrous "Convenience Strategy" of the 1990s.