McDonald's finds way to get Europeans to embrace fast food

Tag : Stainless Roll

A big part of the reason is upgraded menus and high-designrestaurants that have been so successful that they may be exportedto the United States.
The nation's largest hamburger chain reported Wednesday that itswung to a profit in its second quarter, helped in large part by a7.4 percent increase in sales in Europe.
Europe is now the company's largest region by revenues, despitehaving only about one-fourth as many outlets as in the UnitedStates. Last year, revenues were $8.9 billion in Europe, comparedwith $7.9 billion in the United States.
With Europeans so bent on healthy eating, how has McDonald's luredso many customers?
According to analysts and company officials, the company hassucceeded with the help of classy designs and an emphasis onhigh-quality food.
Indeed, Americans in Europe seeking a little taste of home might bedismayed by what they find under the familiar golden arches.
"A huge chunk of the company's success comes from giving locals thekind of foods they like, instead of force-feeding American menuitems to them," said Ron Paul, president of Technomic Inc., aChicago-based restaurant research firm.
There's porridge in Britain and pasta freshly cooked to order inItaly. In France, there's a smaller-sized burger on a ciabatta rollslathered with a sophisticated mustard sauce — and servedwith a glass of wine.
The restaurants' decor is another culture shock.
Green swivel armchairs. Modernist murals. Elegant wood, leather andstainless steel instead of retro plastic and Formica fittings.
Even the Ronald McDonald play areas have been given a face-lift andrechristened Ronald Gym Clubs. Pits full of plastic balls have beenreplaced by climbing walls, bicycle simulators and basketball hoopswith electronic scoreboards.
"Contemporary design has played a very important part to makeMcDonald's a destination," said Carmen Vroonen, a spokeswoman forMcDonald's Europe.
During the 1990s, growth at McDonald's Europe was mediocre at best.But then Denis Hennequin, the head of McDonald's in France, askedto recreate the chain's standardized template into a bistro-likecafe. Soon France was the company's most profitable market inEurope.
In 2005, Hennequin became the first non-American to hold the job ofpresident of McDonald's Europe since the company arrived on theContinent in 1971.
Since then, the overhaul of the restaurants and their menusthroughout Europe has been dramatic.
Thanks to the upgrades, Steve West, restaurant analyst with St.Louis brokerage Stifel Nicolaus, predicts that McDonald's willenjoy 9 percent growth in European sales in 2008.
"The remodels have had a positive impact on the performance of thestores," he said. "They are cleaner and nicer looking and morerelevant to local tastes than the previous cookie-cutter versions."
Last year, McDonald's remodeled 640 restaurants in Europe, withanother 805 on tap this year. This represents a significantinvestment, considering that the work can cost between $411,000 and$686,000 on average.