Not lovin’ it: McDonald’s to close over 500 restaurants worldwide to stay afloat
McDonald’s will shut down 500 stores this year in an effort to boost profits. Even as the world’s biggest fast food chain moves its headquarters to a $250 million 608,000-square foot complex in Chicago’s West Side in the spring of 2018; 500 will weaker-performing locations will close.
McDonald’s spokeswoman Becca Hary confirmed the announcement, released just days after it withdrew its branches from Middle Eastern and three Latic American, countries, in an email to The Street:
“It’s important to note that while we will have a net reduction in restaurants [in the US], the impact is minimal in comparison to the 14,000 restaurants we operate across the US. We consistently review our restaurant portfolio and make strategic decisions to better position our business for the future.”
In 2015, McDonald’s closed 700 underperforming restaurants in Japan, the US and China, 350 more than it had planned, due to a significant decline in global sales. McDonald’s Ceo Steve Easterbrook had informed the Wall Street Journal last year that big changes were required in order to improve the company’s financial struggles.
“I think there is a hunger and an interest in our business to embrace change. McDonald’s management team is keenly focused on acting more quickly to better address today’s consumer needs, expectations and the competitive marketplace.”
— BusinessInsiderIndia (@bi_india) June 21, 2016
In 2016, McDonald’s has pledged its capital expenditure at $2 billion, with half allocated to reinvestment in its best locations and the other half to open 1000 new restaurants.
According to the Washington Post:
“Each time McDonald’s has announced how much money it’s making, the company has been forced to share an embarrassing truth: Americans are eating less and less of its hamburgers, chicken nuggets, and French fries. The routine became so consistently depressing that McDonald’s decided to quit sharing monthly performance data altogether in March.”