On Tuesday, McDonald’s Corporation (NYSE:$MCD) – otherwise known as the largest fast food chain in the world – disclosed that it has plans to open 2,000 new restaurants across China over the course of the next five years, thus bringing the total to 4,500.
According to Steve Easterbrook, McDonald’s CEO, “China will soon become our largest market outside of the United States.”
Both McDonald’s and the company’s new business partners, Citic and Carlyle Group, hope these new restaurants will help to increase double-digit sales growth for the business every year for the next five years. In order to do so, the Oak Brook, Illinois-based company is targeting smaller Chinese cities.
The new plans come just as McDonald’s sold off the majority of the China business to Citic and Carlyle. According to the company, these investment firms will bring a better understanding of the local market. The deal was announced towards the start of 2017, and under the terms of the agreement, McDonald’s holds a 20% stake in the business.
Easterbrook has been trying to rebuild McDonald’s, and this move is a clear indication that he is following through with his plans. It’s fair to say that the company’s latest financial results were welcome news to investors, as an increase in U.S. sales provided more evidence that Americans are returning to the fast food chain.
It’s worth mentioning that the Golden Arches is not the only big U.S. company whose brand is moving into Chinese territory. In fact, Starbucks (NASDAQ:$SBUX) disclosed plans in 2016 to open more than one new store a day in China over the next five years. With this, it hopes to have 5,000 stores across China by the 2021.
Featured Image: depositphotos/teamtime
