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McDonald’s ups its expansion pace with goal of 50,000 stores

McDonald's is seeking to expand to 50,000 locations by 2027.   (Dreamstime/Dreamstime/TNS)
By Daniela Sirtori-Cortina Bloomberg

McDonald’s Corp. is looking to hit 50,000 locations around the world by 2027 in what the company calls the fastest expansion spurt in its history.

The chain currently has more than 41,000 restaurants and already committed to opening an extra 2,000 by the end of this year.

The new target highlights the burger giant’s stepped-up ambitions as it looks for its next leg of growth.

New restaurant openings will boost systemwide sales by 2% next year and by 2.5% after 2024, McDonald’s said Wednesday in a statement ahead of a presentation to investors.

Systemwide sales are those generated by all McDonald’s restaurants, from company-operated to franchised locations.

The expanded footprint is part of a multiyear growth plan that includes a renewed focus on marketing, core menu offerings such as hamburgers, and digital channels including delivery, the mobile app and kiosks.

Loyalty focus

McDonald’s is also looking to increase users of its loyalty program to 250 million 90-day active customers by 2027, from about 150 million currently.

It’s targeting an additional $25 billion in systemwide sales from loyalty-program users over the same period, up from $20 billion today.

Part of the plan includes expanding its U.S. pilot of “ready on arrival,” in which crew members start assembling online and mobile orders before guests get to the restaurant.

The chain plans to roll out the test across its top six markets by 2025, according to the statement.

McDonald’s expects operating margins in the mid-to-high 40% range in 2024, which is similar to the last two quarters, and continued expansion in subsequent years.

It’s forecasting capital expenditures of $2.5 billion next year, and sequential increases of about $300 million to $500 million each year through 2027.

The chain has held up in the face of pressured consumer budgets in recent months, beating expectations on sales and profits in the third quarter.

Still, U.S. customer traffic dipped for the first time this year in the period.

The stock rose 8.7% this year through Tuesday’s close, short of the 19% advance of the S&P 500 Index over the same period.