Bloomberg News

McDonald’s CEO Thompson Seeks New African Markets for Expansion

February 10, 2014

McDonald’s Corp. (MCD:US) is looking at potential new markets in Africa after the world’s largest restaurant chain entered a new Southeast Asian country for the first time in more than two decades.

McDonald’s will look at a number of nations for restaurant locations in Africa, which is expected to be part of the fast-food chain’s future growth strategy, Chief Executive Officer Don Thompson said today in an interview in Ho Chi Minh City. On Feb. 8, the Oak Brook, Illinois-based company opened its first restaurant in Vietnam, where it’s trying to catch up with rivals including Burger King Worldwide Inc.

“We’re looking at the opportunities that Africa may yield,” Thompson said. “We’re in ongoing dialogue to build appropriate relationships” on the continent. “There’s quite a few countries across Africa we want to look at, but Nigeria clearly is a large country that has opportunity,” he said.

The company is looking to developing nations for expansion. The chain posted (MCD:US) fourth-quarter profit that was little changed from a year earlier as U.S. same-store sales fell. Sub-Saharan Africa’s economy will expand 6.1 percent this year, compared with global growth of 3.7 percent, according to the International Monetary Fund.

Nigeria’s economy has expanded an average of 8.2 percent annually since 1999, pushing its per-capita income as of last year to $1,725 from $310 in 1999, according to IMF estimates. The West African nation has a population of about 170 million people, the most on the continent.

Burger King

Africa is home to the world’s youngest and fastest-growing population, McKinsey & Co. said in a 2010 report that estimated household expenditure in the continent would expand to $1.4 trillion a year by 2020.

Burger King last year opened its first restaurant in South Africa and said that it would look to open outlets in Botswana, Mauritius, Mozambique, Namibia, Zambia and Zimbabwe, without specifying a time period. There are 29 Burger King (BKW:US) branches in Vietnam, according to Bryson Thornton, a spokesman for the Miami-based company.

McDonald’s new 350-seat branch in Vietnam marks the company’s first new market in the region since Brunei in 1992. In Africa, McDonald’s has outlets in Egypt, Mauritius, Morocco and South Africa.

To contact Bloomberg News staff for this story: Jason Folkmanis in Ho Chi Minh City at folkmanis@bloomberg.net and Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • MCD
    (McDonald's Corp)
    • $94.78 USD
    • 0.95
    • 1.0%
  • BKW
    (Burger King Worldwide Inc)
    • $35.5 USD
    • -1.16
    • -3.27%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus