UK driving McDonald's profits

Published on Wednesday 21 April 2010 20:34

MCDONALD'S yesterday reported better-than-expected first-quarter profits, with the UK and Europe one of its best-performing regions.

The fast-food giant, which has about 1,200 outlets across the UK, reported a 3 per cent rise in group-wide earnings to $1.1 billion (708 million) in the first three months of the year.

Sales rose across all its markets, but especially in Asia and Europe, where same-store turnover lifted 5.2 per cent. The group recently described the UK as its leading market after consumers were drawn to its value meals in the recession. UK like-for-like sales rose 11 per cent in 2009, with the number of customer visits up 7.5 per cent.

The chain's value-menu items have also helped the wider business since 2009, with total revenues for the quarter to 31 March rising 10 per cent to $5.6bn.

This marked a turnaround in group sales, which had dropped in four of the past five quarters as consumers dealt with high unemployment.

The US has been a tougher market, where sales did rise in the first quarter, but at a slower pace. Like-for-like sales in the US – across restaurants open at least a year – lifted by 1.5 per cent in the quarter.

McDonald's – headquartered in Illinois – is in the process of a cafe-style refit for its UK stores, having spent 95m on its refurbishment programme last year. It aims to create a further 5,000 UK jobs this year and open ten to 15 new outlets.