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McDonald's - Source: ONE News -
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The world's largest hamburger chain McDonald's Corp is to boost new store openings in Europe next year to help steal market share from its rivals as trading continues to be robust in the prolonged downturn.
The group's Europe Chief Financial Officer Jerome Tafani said despite difficult markets in Germany and Spain, it planned to open 250 new European stores in 2010 up from 220 in 2009 as 90% of the group's rise in spending is aimed at Europe.
"Our competitors are cutting back on investment, so there is a great opportunity to widen the gap," Tafani told Reuters in an interview on Tuesday.
While McDonald's stores in the United States saw a comparable sales fall in October for the first time in 19 months, by 0.1%, its European stores saw comparable sales rise 6.4% and Tafani.
"The trend in sales we have seen up until October is not going to change in the coming months," he said.
Growth next year will come from more store visits rather than a big rise in spend per visit and Tafani sees little help from any improvement in European economies.
McDonald's has over 6,600 restaurants in Europe, compared to around 33,000 worldwide, which earn 40% of the group's operating income while its 13,000-plus United States' stores contribute around half.
The group competes with world No.2 hamburger chain Burger King in Britain, Germany and Spain, and with pizza and chicken chains and also local competitors across the continent.
McDonald's has looked to counter the economic downturn by pricing core items at low prices such as 1 euro hamburgers and cheeseburgers, and also introducing new products such as snack wraps at low prices.
Tafani says the trading environment in Europe is still tough with unemployment on the rise, especially in Spain.
The group earns 70% of its European income from four countries - France, Germany, Britain and Russia - but while Britain saw comparable October sales up 11.2% and Russia was 10.5% ahead, Germany managed just a 1.1% rise.
Russia is the group's fastest growing European market and there are plans for 40-50 new stores in 2010 to add to its existing 232, while France and Germany both get around 30, Italy up to 40 new stores and Spain as many as 25 new outlets.
McDonald's shares edged up to show gains of 1.2% to $US63.99 by 5pm GMT (6am NZT).
