McDonald’s announcing 900 new restaurants globally over the next two years sounds like a strong growth play, but in reality, I don’t think it’s that aggressive. There’s still plenty of opportunity for international expansion and even still room for strategic growth here in the U.S.
That said, the bigger concern is this: our existing restaurants should not be losing guest counts and McDoanld's growth or breaking even on guest counts coming from new store growth. It’s one thing for a location to take a small TC hit but it’s another when we’re sacrificing long-standing restaurants that cannot take lost sales and TC's for new growth. Sustainable growth means keeping current restaurants strong and opening smart new locations.
It often feels like McDonald's Real Estate is chasing broker deals instead of driving the market meeting with Operators to get their insights. I once had a Regional Manager call me about a site, I said, let’s meet drive the site go have dinner, and drive it after at 8pm. He agreed. Two weeks later, based on what we saw, he killed the deal. That kind of thoughtful evaluation feels rare today.
Lastly, development costs are too high. Either those costs need to come down, or returns need to be spread over a longer timeframe on McDonald's side. Otherwise, even good sites don’t pencil out.
Nine hundred new stores globally doesn't sound scary, but the article says it's 900 for the USA. That's a lot!MCD Corp hasn't announced an official target in the USA. The 2024 annual report says "... 600 in the U.S. and international operated markets". That could mean 500 in the USA, or it could mean 200. Even 200 is a lot of cannibalization in a fully saturated market.For reference, in 2024 the total number of USA MCD stores increased by 100. In 2023, the total number of USA stores increased by 13.
We don't know if the reporter just picked up the wrong numbers from another article or has some updated numbers from corporate. The numbers I'm using are from the annual report and the MCD website. They would be six months old or older. Needless to state, Relos and rebuilds are not a factor in these totals (or, they shouldn't be). .
"Sustainable growth means keeping current restaurants strong and opening smart new locations." The first step in filling holes in an already saturated market is looking for possible sites near the highest volume stores. It makes no sense to impact low-volume or unprofitable stores. It's doubtful you'll get "smart new locations" from a corporate team that has so little experience in locating new MCD stores. .
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McDonald’s announcing 900 new restaurants globally over the next two years sounds like a strong growth play, but in reality, I don’t think it’s that aggressive. There’s still plenty of opportunity for international expansion and even still room for strategic growth here in the U.S.
That said, the bigger concern is this: our existing restaurants should not be losing guest counts and McDoanld's growth or breaking even on guest counts coming from new store growth. It’s one thing for a location to take a small TC hit but it’s another when we’re sacrificing long-standing restaurants that cannot take lost sales and TC's for new growth. Sustainable growth means keeping current restaurants strong and opening smart new locations.
It often feels like McDonald's Real Estate is chasing broker deals instead of driving the market meeting with Operators to get their insights. I once had a Regional Manager call me about a site, I said, let’s meet drive the site go have dinner, and drive it after at 8pm. He agreed. Two weeks later, based on what we saw, he killed the deal. That kind of thoughtful evaluation feels rare today.
Lastly, development costs are too high. Either those costs need to come down, or returns need to be spread over a longer timeframe on McDonald's side. Otherwise, even good sites don’t pencil out.
Nine hundred new stores globally doesn't sound scary, but the article says it's 900 for the USA. That's a lot!MCD Corp hasn't announced an official target in the USA. The 2024 annual report says "... 600 in the U.S. and international operated markets". That could mean 500 in the USA, or it could mean 200. Even 200 is a lot of cannibalization in a fully saturated market.For reference, in 2024 the total number of USA MCD stores increased by 100. In 2023, the total number of USA stores increased by 13.
Source: https://corporate.mcdonalds.com/content/dam/sites/corp/nfl/pdf/Restaurants%20by%20Market%202024.pdf
https://corporate.mcdonalds.com/content/dam/sites/corp/nfl/pdf/Restaurants%20by%20Market%202023.pdf
We don't know if the reporter just picked up the wrong numbers from another article or has some updated numbers from corporate. The numbers I'm using are from the annual report and the MCD website. They would be six months old or older.
Needless to state, Relos and rebuilds are not a factor in these totals (or, they shouldn't be).
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"Sustainable growth means keeping current restaurants strong and opening smart new locations."
The first step in filling holes in an already saturated market is looking for possible sites near the highest volume stores. It makes no sense to impact low-volume or unprofitable stores.
It's doubtful you'll get "smart new locations" from a corporate team that has so little experience in locating new MCD stores.
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