More than 400 of the new Golden Arches will be in the US or in its internationally operated markets, including Germany, Canada, France, Australia, Canada, and the U.K. The remaining 1,500 will be in developmental licensee and affiliate markets, including 900 in China.
The fast-food giant plans to spend $2.2 billion to $2.4 billion on capital expenditures, half of which will be dedicated to new net openings, CFO and EVP Ian Borden said on a call with investors following the company's Q 4 earnings results.
We expect to see over 4% growth from about 1,500 net restaurant additions in 2023. He said that nearly 1.5% of sales growth will be contributed to the systemwide sales growth, along with restaurants opened in 2022.
McDonald's has made a big push into growing its U.S. locations since 2014, for the first time since 2014. However, BTIG Managing Director Peter Saleh said he expects U.S. store openings to be a very small portion of the new stores.
The growth in the U.S. is not that big as it is in the U.S. At best, I think they're going to open about 100 stores, then at least another 80 get to about a net number of about 20. Saleh said the chain's growth strategy is welcome news to U.S. franchisee owners. Franchise owners make up about 95% of McDonald's total portfolio.
From our conversations with franchisees, they said, Yes we need more stores, because the volumes in the stores that we have, have grown so much that we need to offset it with additional units.'' In Q 4th, 2022, U.S. same-store sales increased by 10.3%, compared to 7.5% in the same quarter of 2021.
CEO explains why now is the right time to expand growth.
CEO Chris Kempczinski believes that the time is right to boost growth, with global same-store sales up over 12%, despite ongoing concerns over inflation's impact on construction and development costs.
Kempczinski said that when it comes to unit growth and comparable sales growth, we have to walk and chew gum. It is not one or the other, it's the two of them in combination. When you want to be growing units, you need to have strong comparable sales, because that reflects the underlying health of the business. Kempczinski said that I am very leery when I see someone out there putting a strong unit growth number without strong comparable sales, because that's historically not a good recipe in our industry. This growth plan was added to its updated Accelerating the Arches Strategic Plan, MCDD, now in 2.0, following the addition of a fourth D, which stands for restaurant development.
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at BrookeDiPalma or email her at bdipalma yahoofinance.com.