McDonald's to open 25 outlets a year in SA

15 Sep 2011

As competition in the fast-food sector increases locally, McDonald's SA plans to open 25 new restaurants a year and double revenue in the next four years, MD Greg Solomon said yesterday, 14 September 2011.

"The business is well positioned for growth, the past three years from a business performance perspective have been the best. We have even bigger dreams for the company," Solomon said.

The company had a "beady eye" on African expansion, but would not be first off the mark, he said. "We have strong growth prospects in SA, this would prevent us from entering the African market within the next two years. We do not have an extensive local footprint yet and believe there are still strong growth prospects in SA.

"It is a brave move to not follow the tsunami into Africa, but we need to capitalise on this business first," he said.

Nothing had changed since businessman Cyril Ramaphosa's company, Shanduka, acquired the 20-year master franchise earlier this year to run all McDonald's restaurants in SA, he said.

On the emergence of new players on the scene such as Burger King, Solomon said McDonald's was "studious".

"The South African market is already quite competitive and our existing brands are already strong. We will be watching the competition, but we will also be focused on what is happening in our business.

"McDonald's has always been a trailblazer, from bringing the drive-through model and 24-hour stores to serving breakfast. Now about 10% of our revenue is from the breakfast offering."

Last week, Spur Corporation MD Pierre van Tonder said Spur's breakfast offering had positively affected the business as the company increased revenue 15.9% to R403,4m in the year ended June 2011. It planned to open 15 more stores in the 2012 financial year.

Meanwhile, Famous Brands has embarked on a rebranding exercise for its flagship, Steers. With about 520 outlets across the country, Steers grew sales 6.5% in the year to February, and said it planned to open 20 more stores this year.

As for the bad press that often plagues McDonald's, Solomon said the size of the company made it a target.

"It is about educating our customers. Our food is not unhealthy. The beef patties are made from 100% beef, and so are the chicken burgers.

"It is about giving consumers the choice. We do serve salad you can substitute a Coke with a fruit juice, or corn for chips," he said.

Source: Business Day

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