In December of 2023, McDonald’s Corp. announced a goal of operating 50,000 stores worldwide by the end of 2027.
It’s challenging to track exactly what this means for McDonaid’s USA since the announcement combines the USA and IOM. Some press articles stated that the target for the USA is as low as 600 new stores. Some reporters thought management is targeting 900 or 1,000 for the USA. Six hundred stores are a substantial number, especially considering the current circumstances.
In the year 2023, there was no increase in the number of stores in the USA. In 2024, the count increased by approximately 100 stores. The first-half of 2025 results, to be released in August, should provide valuable insights.
December 2027 is approaching quickly. It’s two and a half years away, or 30 months. Let’s guess that McDonald’s USA has opened 100 new stores in the first half of 2025. That’s twice the pace of 2024.
The trouble is, if we stick with the 600-store number, it means 100 opened in 2024 and 100 so far in 2025. That leaves 400 stores for McDonald’s USA to open in the next 30 months. That’s a lot for a company that has been in the business of downsizing over the past decade. Can the domestic system handle 600 new stores? 700?1,000?
This is a repeat of the 1990s “Convenience Strategy”, Oak Brook fell on their face trying it back then. And that was when the corporation was staffed with experienced, knowledgeable people.
8 comments:
Note: The term "New Stores" would be the net of stores opened minus stores closed. We won't be seeing many store closings in '26-'27.
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Corrections to my numbers or disagreements with my guesstimites are welcome. Or send me an E-mail.
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There is a McDonalds in nearly every trade area in the United States.. If a new retail center is built, there is a McDonalds on nearly every route that drives in or out of it, with drive thru. How exactly is this going to help an owner/operator? When its the for a hugely expensive remodel and that O/O is down 25%, how will that work?
This rush to open more stores isn’t strategy—it’s desperation. Wall Street demands growth, so leadership builds—never mind that the system’s already wrung dry. Operators are expected to do more for less while support fades and margins shrink.
When an operator turns down a new store, the fallback is another operator and if none are found it's McOpCo—which helps us. Nobody mismanages a restaurant better than the company itself. That's a better competitor than a Wendy's or BK anway.
They want fewer operators owning more because when one store loses money, it gets buried in the averages. Profitability per line item is buried in 30 stores and jet fuel expenses. When one or two is all you've got you don't miss much. That was and is their plan.
Meanwhile, we've been asking for automation and new drinks for years. Instead, they launch CosMc’s—a brand built with our money, using our products, brands built with our money too, competing with us directly. They believe for them to do better someone has to do worse. That's not how it works. Maybe in their lives but that's a window into their horribly misaligned values and world.
Operators still hold the leverage. If enough said no, the system stalls. The juice isn’t worth the squeeze—and hasn’t been in a long time.
As Nancy Reagan said, just say no. Watch what happens. McOpCo is welcome!
By the way, where did that 50/50 McCafe profit split go?
Desperation is indeed the word. Expecting to be able to open a bunch of new stores and still preserve same store sales growth is proof this gang doesn’t understand the McDonald’s business or business in general.
When SSS falters from impact (mid-2026) reporters, analysts, and investors will ask “what’s wrong with McDonald’s”? Everyone will have their idea on how to fix things. Management will try to placate the investors by being all things to all critics. These bad ideas will bring a few more years of weak sales. The year 2031 will see some sales recovery. McDonald’s watchers will be calling for changes at the top but this will be impossible since the CEO is also the chairman of the board.
The pajama boys (and girls) in Chicago dont care about the operator at all because the operators are far too timid to use their combined clout of operating 95% of the stores and just saying NO. The operators had the perfect answer to this - unify under a single banner called the NOA, but too few owners were smart enough to take advantage of this combined strength. So now the sheep are being lead to the slaughter.
DA, interesting predictions!
They aren't really predictions but a retelling of what happened in the 1990s. Same corporate intentions, same O/O reaction (more stores !!!), same problem with having the CEO and BOD jobs in the same person.
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