McDonald's Corp. is not satisfied with how its fast-food restaurants are performing in China but is content to grow slower there than it has elsewhere, the head of the company's Asia unit said.
"I'm not into a numbers game. We did those years ago build it and they'll come'," Tim Fenton, president of McDonald's Asia-Pacific, Middle East and Africa unit said. "I'm about getting it right, because that's a decision that wills last 20 years."
McDonald's has about 770 restaurants in China, ranking it as the second-largest restaurant chain behind KFC, the fried chicken unit of Yum Brands Inc., which has more than 1,700 outlets there. KFC's rapid growth has been spurred in part by Chinese consumers' affinity for chicken.
Fenton has been at the helm of McDonald's Asia business since early last year and has started to turn around the company's restaurants in China after struggling with deep discounting that hurt profits and sales.
After posting slightly negative sales at restaurants open at least 13 months in 2005, McDonald's same-store sales in China are up slightly less than 2 percent so far in 2006, Fenton said.
He attributed that improvement to having more locations that are open 24 hours, the addition of a higher-priced Quarter Pounder to the company's menu in China, and a more centralized marketing effort.
Still, Fenton said he's not satisfied. "I'm not totally happy with our business model," he said, adding that the chain is content to add about 100 restaurants a year in China "for the foreseeable future." That's significantly fewer than KFC, which opens a new location in mainland China every day, on average.
Still, McDonald's is banking on substantial growth in China over the long term. Its supplier network is currently bigger than its demand, Fenton said.
Breakfast, which the company is expanding from 350 restaurants to all its Chinese restaurants next year, is also expected to help sales, but not immediately. "We know breakfast is not an overnight sensation," Fenton said. "I'm thinking three to 10 years."
About 38 percent of Chinese consumers eat breakfast outside the home, and that number is growing, Fenton said, noting that breakfast sales currently account for 4-6 percent of total sales at McDonald's restaurants in China that currently serve breakfast.
Delivery is another initiative McDonald's is weighing in China, Fenton said. Delivery service has served the chain well in other markets, he said, adding that it accounts for about 27 percent of sales in Egypt.
Source:佚名