McDonald's hopes to get bigger bite of Asian markets

HONG KONG - McDonald's Corp, the world's largest restaurant company, may boost investment in Asia by at least 20 percent this year as consumer spending recovers, moving into "beef eater" markets such as South Korea.

The seller of Big Macs will invest $415 million in Asia, the Middle East and Africa this year to add 520 restaurants, Tim Fenton, head of the chain's regional business, said in an interview in Hong Kong. Spending in the region was about $350 million in 2009, he said.

"McDonald's is really the only company with the best portfolio of markets around the world," Joel Silverstein, president of Hong Kong-based restaurant consultant East West Hospitality Group Ltd, said in phone interview. "In Asia, they are still growing."

Oak Brook, Illinois-based McDonald's last year generated 19 percent of its sales from the region, an increase from 18 percent in 2008 and 15.8 percent in 2007.

Sales from the Asia-Pacific, the Middle East and Africa increased 2.5 percent in 2009, compared with declines in the US and Europe, as rising incomes in China drove consumer spending and diners in Japan and developed countries chose less-expensive meals.

McDonald's may "aggressively start expansion" in South Korea, where comparable sales growth has been "double-digit" in the past four years, Fenton said in the interview, which took place on Friday. The company operates 227 outlets in the country.

"(South) Korea is a big market for us: you've got 48 million people, a $30,000 average household income and beef eaters," Fenton said. McDonald's plans to invest $15 million in the country this year, and twice that in 2011, he said.

Bloomberg News

(China Daily 03/30/2010 page14)