IT SEEMS that not even McDonald’s is recession-proof. At a media briefing this week, the fast-food giant said it expects to increase its sales by about 3.5 per cent this year and not the 5 per cent originally budgeted.
Its like-for-like sales rose by 6.2 per cent in 2007.
Still, in the current economic climate that would be a decent outcome.
Like other retailers, McDonald’s cost base is under enormous pressure. Beef prices will increase by 17 per cent on July 1st, while rising energy and other costs are also set to take a bite out of profits.
In spite of this, the fast-food giant will increase its menu prices by just 1 per cent on July 1st – a factor of operating at the value end of the restaurant trade.
McDonald’s continues to invest in its real estate here. The company and its franchisees will spend €8.2 million this year refurbishing 14 restaurants and opening a new outlet in Sligo.
Five more McCafes are in the pipeline and a handful of sites have also been identified for new openings next year.
In spite of the economic slowdown and rising costs, McDonald’s said the impact on the bottom line of its Irish business would be neutral. They’re still “lovin’ it” here – just not as much.
