Golden arches glow in gloom

KIRK HARGREAVES/ The Press

GLOWING: McDonald's New Zealand appears to be bucking the recession, enjoying strong same-store sales growth and planning to open seven new stores this year.

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McDonald's New Zealand appears to be bucking the recession, enjoying strong same-store sales growth and planning to open seven new stores this year.

Globally, McDonald's reported same-store sales growth of 4.3 per cent in the March quarter with gains in all major markets except China and Germany.

In New Zealand, same-store sales growth was up by 7 per cent in the quarter, managing director Mark Hawthorne said. This came on the back of 10 per cent growth in 2008 and 7 per cent in 2007. Growth in 2005 and 2006 was relatively flat, he said. "We seem to be continuing strongly this year."

McDonald's growth in New Zealand was being driven by a range of factors, Mr Hawthorne said. "We've seen a product mix shift into cheaper items on the menu, which is no surprise."

About 70 per cent of the fast food chain's 70 stand-alone drive-through stores were now open 24 hours a day seven days a week, which had boosted sales, Mr Hawthorne said. "Those have probably been the two major growth factors."

McDonald's New Zealand had also spent a lot of money re-imaging restaurants and improving the menu and service times, which had also contributed.

There was no doubt the recession was causing some people to trade down to McDonald's but equally it was causing some consumers to cook at home instead of eating fast food. "It's [the recession] just shifting the mix around a bit."

McDonald's is outperforming KFC, the star performer in the Restaurant Brands portfolio, which had same-store sales growth of 4.1 per cent in the year to February.

Mr Hawthorne claimed McDonald's was stealing market share from Burger King and performing "reasonably well" against Subway, which it regards as its main competitor.

McDonald's was planning to lift its total store numbers from 143 now to 150 this year, he said. "It's one of our most aggressive years in expansion we've had in a while. We will probably open more freestanding restaurants this year than we have in the last eight years combined."

The softer real estate market was aiding McDonald's in terms of getting access to sites.

- © Fairfax NZ News