McDonald’s has announced it will seek to open 700 new stores in China by 2013, bringing its total number of restaurants in China to 2,000. From Market Watch:
McDonald’s Corp. is planning its biggest expansion in China by aiming to open 700 new stores by 2013, as the fast-food giant faces increasing challenges from competitors.
The company plans to expand operations to 2,000 stores by 2013, up from its current 1,300, according to McDonald’s spokesperson Betty Tian. It will also hire 50,000 new employees, including 1,000 university graduates for management training positions.
“McDonald’s is expanding faster in China than in any other market in the world, so this is the right time for talented individuals to join our winning team,” said Kenneth Chan, chief executive of McDonald’s China, in a statement.
This move is a response to greater competition McDonald’s faces from other fast-food restaurants in China. Recently, Yum Brands Inc., which owns KFC and Pizza Huts in China, announced it would move to acquire Little Sheep Group Ltd., a popular hot pot chain. From Wall Street Journal:
Yum Brands Inc.’s preliminary offer to take full control of Little Sheep Group Ltd., the operator of a popular hot-pot chain in China, has signaled a new growth strategy for Yum’s largest market.
Analysts said the move indicates that Yum, which has 3,800 KFC and Pizza Hut outlets in China, is looking beyond pizza and chicken to establish its own presence in the rapidly growing market for Chinese casual dining.
Yum said after the close of Hong Kong trading Tuesday that the company had submitted a preliminary proposal to buy all of Little Sheep’s outstanding shares, apart from a minority stake to be owned by the chairman and other founders. Little Sheep Chairman Zhang Gang owns 2.4% of the company. Possible Way International Ltd., which is based in Hong Kong, owns 29.9% of Little Sheep’s shares.
Yum, based in Louisville, Ky., declined to release details of its proposal and said there is no assurance the company will make a formal offer. Yum said any formal offer would depend on regulatory approvals.
China accounted for 54% of Yum’s overall profit of $264 million in the first quarter of this year. Yum has grown in popularity with Chinese consumers by adding Chinese-style items, such as fried shrimp and seafood-topped pizza, to its menus.