McDonald’s experiments with retail formats in £1bn rollout
Smaller format stores and ‘Drive to’ outlets are part of the fast food giant’s plan to extend its UK footprint, as the business attempts to bounce back from its first sales drop since 2020.
Experimenting with new restaurants formats will be form a cornerstone of McDonald’s plan to invest £1bn in the UK market over the next four years.
The fast food chain, which plans to create more than 24,000 jobs across the country with the opening of 200 new restaurants, will trial smaller format stores this year and ‘Drive to’ outlets with a car park, small seating area and no drive-through.
The plans will also involve a renewed focus on opening high street restaurants nationwide in town and city centres. Alongside new restaurants, McDonald’s will continue to upgrade more than 1,500 existing restaurants across the UK and Ireland.
The trial of new formats is already underway in the brand’s US home market. Late last year McDonald’s launched CosMc’s, a small-format, drinks-led concept in Illinois. The format fuses retro styling and imagery with “beverage exploration” of a range of speciality lemonades and teas, slush drinks and cold brews. The retailer offers customisation at every stage from flavour syrups to vitamin C shots. A range of snacks is also available.
I’m delighted that in this milestone year we are able to demonstrate our ongoing commitment to growth.
Alistair Macrow, McDonald’s
The company plans to open 10 US branches of CosMc’s in the US by the year, with a mixture of drive-thru and walk-up locations.
The expansion plans coincide with the launch of the McDonald’s at 50 report exploring the impact the golden arches have had on communities across the UK since the first branch of McDonald’s opened in Woolwich, in 1974.
Between 2018 and 2023 McDonald’s invested £618m in delivering new restaurants and upgrades. Last year, the chain opened 41 new restaurants across the UK, the highest number in two decades.
The expansion announcement comes hard on the heels of the brand’s first fall in like-for-like sales since 2020, announced last month, which caused CEO Chris Kempczinski to admit a “comprehensive rethink” was required in some markets.
McDonald’s has been evolving its pricing methodology in the UK based on its expanding loyalty scheme. Speaking to investors in February, Kempczinski explained finding a balance between price growth and footfall growth is a “North Star” for the company.
“As we continue to attract millions of new loyalty members, we can get even smarter with our pricing methodology and tailor our digital offers to our fans, making them even more personalised,” said Kempczinski.
‘Milestone year’
The new loyalty scheme and branch formats will determine how successfully McDonald’s enters its second half-century in the UK.
“We have come a long way since we first opened our doors in Woolwich 50 years ago,” says McDonald’s CEO UK and Ireland, Alistair Macrow.
“We have become an important part of communities across the UK and I’m delighted that in this milestone year we are able to demonstrate our ongoing commitment to growth.”
According to Macrow, the focus is on providing value, investing in its restaurants and supporting UK suppliers. In 2023, McDonald’s spent £2bn with UK-based farmers and suppliers, supporting 209,475 jobs.
Since its UK launch in 1974 McDonald’s calculates it has contributed £94.45bn to the UK economy, spending £51.56bn with UK suppliers.
