John Atherton the managing director of McDonald’s Ireland says that although the recession means a tough trading environment; McDonald’s is weathering the recession better than most.
Turnover for its 78 restaurants in Ireland broke €200 million for the first time in 2009 – an increase of 3 per cent on the previous year. Sales are expected to be “slightly ahead” in 2010, even though it has served one million more customers so far this year.
“The actual spend is declining,” Atherton says. “What we’re seeing in our restaurants is that people are trading down.” In a recent interview with the Irish Times Atherton would not divulge a figure for “system-wide profits” but said tax paid in 2009 was €3.3 million. Based on a 12.5 per cent rate, this would indicate a profit of €26.4 million.
On a sour note, four store openings planned for this year were delayed. “It’s probably been the most frustrating aspect of trading this year for us,” Atherton adds. “Developers are having difficulty accessing finance and those in Nama have business plans that need to be signed off. This is slowing up development. “The planning process [also] seems to have been slower this year. There are two we’re confident of opening next year [Liffey Valley and Swords] but it’s frustrating for us as a business.”
On the flip side, McDonald’s global HQ chose Ireland over Singapore to trial new technology that will allow customers to order their own meals via terminals.
So what is Atherton expecting from 2011? “We’re expecting it to be as tough as in 2009 and 2010. Although we will see some recovery in exports, I just think consumer confidence is going to take a long time to recover. Until we start creating jobs and get people back on the streets, I just can’t see trading conditions getting any better Footfall numbers are down, tourist numbers are down, so it’s just less people around and a shrinking market.”
That though won’t stop McDonald’s investing another €6.5 million next year to give more of its restaurants an improved look. “We’ve got to hold our nerve and add value through the customer experience. There’s more to McDonald’s than just price.”