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The Retail Lifestyle Champions: McDonalds' trying a new R-Gym for obesity lawsuits

English: McDonalds, Sydney
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Our schedule kept us from trying the MacMenu recipe or more the “menu for success” earlier in these columns even as Coke, Disney and McDonalds continue to remain global favorites not just for their brands  but also for their fast growing business models a reason for P&G, Nestle, Starbucks and Pepsi to emulate them among other host of global successes that failed in big foot markets in Asia and Latin America. May be Ford and GM also have a lesson to catch from them! Though this analysis does celebrate their 30 consecutive quarters of unbroken comparable sales growth, most over 5%


Its proactive approach across the last 5 – 6 years has definitely won it large scale corporate success and is also among the few rolling out social and HR bedrock strategies in its new markets across the pond though it is one of the few with very limited success in its premium approach in Europe. Consistent attention pays not just in quality for the customer but in quality and consistency of earnings.


McDonalds’ continues to blaze through a new menu based on healthy items and the relative success of McCafes with unabated ‘same store’ growth.  It was the largest job creator in the summer season as well and is continuing to grow in China, India and other far reaching International markets where other Global food brands except Coke had to refashion strategies and await long gestation periods. It is among the few participating int he Yuan fund raising market in China with $ 2bln raised in local currency for large expansion in China and is set on reaching a minimum scale of operations in India having started tentatively on Europe’ experience. In India it is now working with REtail Association of India to ensure retail is a part of the cirriculum in colleges and ensures future jobs for Indians.


In Q2 it had reached a $1.35 in EPS with the summer kicker,  growing 11% year on year in Op Profits on a very large base making that growth creditable.   It followed upQ2’s 6% comparable sales growth with 5% in Q3 and the 8% increase in Op Profits Y/Y with EPS up 6% to $1.45. Even in Q3 2010 its EPS was a healthy $1.29.


McCafe Logo

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It had ended 2010 with Sales of $24 Bln, Profits of $ 9 bln (EBITDA) with net profits of $4 bln including a $ 2 bln expense. It added 675 stores in the Asia Pacific, of which the 200 in China took it to 1300 outlets in the country. In Europe 70% of the interiors and 40% of the exteriors were remodeled with McCafes reaching 1300 outlets.


McCafes provided a 20% jump in 2010 December over the previous year even as Europe and US sales contracted 4% and 2% respectively. Its global successes in 2010 included the Dollar breakfast menu and new additions in McCafe as well as the unqiue McRib choice in the US. In the latest quarter, McNugget sales were up 10% over last year in the US In Australia the menu now haas a new Cheese and Chicken snack and the McWings. Commodity cost increases were limited to 3-4% globally for the 2011 forecast. The APMEA markets runa special Value Lunch program in many markets (I’m Lovin’ it )


Beverages also remain an opportunity around the world. In the United States, we energized our McCafe line with two additions; Frozen Strawberry Lemonade and Mango Pineapple Real Fruit Smoothies. These new offerings added to our specialty beverage lineup, helped to increase total McCafe beverage sales by 16% over last summer’s strong numbers.(3Q Transcript, Vice Chair, David )

BERLIN, GERMANY - OCTOBER 14:  Actress Andie M...

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The $9bln plus in Franchise revenues came at a 82.5% Franchise margin. Average store volumes grew from $2.4 mln per year to $2.49mln with a cash of $364,000 per outlet Australia and China will have 650 and 250 McCafes by the year end. Breakfast menu has become 13% of sales in UK and 8 in China in another category dominating growth. Oatmeal, Yogurt Parfait and Fruit and Walnut Salad appear on the company’s breakfast menu in the US as innovation with breakfasts ( read Egg McMuffin) making 25% of US sales McRibs has just been introduced in France in Q3, giving it enough cyle to push around the successful innovations in its major markets. There are 750 McCafes in Germany alone.


After having succeeded with rejuvenating the Mac with McCafe across US and Europe, the company is now looking at converting unca Ronalds’ playpens into children’s gyms keeping up the spirit of innovation that keeps its markets in US and Europe growing almost at the same pace as “Emerging ” Markets of Asia, Australia and Africa




English: An Egg McMuffin breakfast sandwich fr...

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This entry was posted on December 23, 2011 by in Global, Retail Lifestyle, US and tagged , , , , , , , .


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