Europe June 10, 2010, 12:36PM EST

McDonald's Still Hungry for U.K. Growth

Revamped stores, more franchising, and staff training have already lifted sales in Britain. But Northern Europe chief Steve Easterbrook aims to gain more ground

Story Tools

High energy levels are no guarantee of success as a chief executive, particularly at a fast food chain in the UK where its 2.5 million customers a day can vote with their feet. But it helps, and if the recent exploits of Steve Easterbrook, the president of McDonald's Northern Europe, are a guide he has plenty.

Last weekend, Mr Easterbrook, who became chief executive of McDonald's UK in 2006, completed a sprint triathlon at Blenheim Palace, comprising 750m in the water, 20km on the bike and a 6km run. For the record, he completed the event in one hour 48 minutes.

He competed in the race safe in the knowledge that McDonald's UK had delivered strong underlying sales just ahead of the overall figure of 5.7 per cent growth in Europe in May, which was unveiled on Tuesday.

This week's results provided further evidence of McDonald's (MCD) tasty performance in the UK after two years of barnstorming underlying sales growth.

But since opening its first restaurant on these shores in Woolwich, London, in 1974, McDonald's has not always had things its own way.

When Mr Easterbrook, 43, took the helm in 2006, its estate of 1,200 restaurants had been underperforming for a couple of years. He took on the additional responsibility for Sweden, Finland, Denmark, Norway and the Republic of Ireland in 2007.

But Mr Easterbrook, who first joined McDonald's in 1993 after being an accountant with Price Waterhouse, had an ambitious plan to fight back on the trading front and dampen the fire of its plethora of opponents, from environmental activists to campaigners on child obesity.

It's fair to say that on the PR front, Mr Easterbrook has to be both a politician – armed with justifiable rebuttals on contentious issues – as well as the boss of one of its US parent's most important overseas operations.

For instance, on the subject of obesity, Mr Easterbrook says that while McDonald's has an important role to play, so does the Government and individuals. After all, he says it had reduced the amount of salt, fat and sugar on its menu, where it has not changed the taste that customers prefer. He also points out that more than half of its Happy Meals for kids are now sold with a non-carbonated drink, and customers on average only eat in its outlets three times a month.

Furthermore, he became McDonald's first ever executive to have a live debate with Eric Schlosser, the author of the Fast Food Nation book, on the BBC's Newsnight four weeks after taking the helm.

Soon after, he was also behind McDonald's setting up a website, makeupyourownmind, to encourage debate and respond to people's concerns. "We wanted to send a signal of a step change in the way that we were going to be seen as a business. We were a faceless business, we were seen as being difficult to get to, and introspective," says Mr Easterbrook.

To deliver growth at its restaurants, McDonald's has invested across the business, improving its menu, as well as investing in staff training, kitchen technology and point of sale equipment over the past four years. Given that McDonald's has not increased a significant number of outlets, the uplift in underlying sales of 10 per cent in 2008 and 11 per cent last year has been largely driven by more customers.

More specifically, a key driver of growth has been the radical "reimaging" of its restaurants, including a new colour scheme, fixtures and fittings, and seats, which kicked off in 2007. The refurbishment is now 90 per cent complete on the high street and around half for its drive-through restaurants. "Our customers really enjoyed and appreciated the change – it was a more comfortable environment, more modern and they felt more comfortable hanging out in," says Mr Easterbrook, who is a keen follower of cricket and Watford Football Club.