McDonald's Q1 growth short of target

Chief executive and chairman Hester Chew said much of the growth was attributed to its expansion of new outlets, but same-store sales grew by only 3-4 per cent during the first three months of 2015.
“The first quarter is still not good. We’re still in a waiting and see [period] in the second and third quarters,” he said.
McDonald’s sales in major tourist destinations such as Samui and Phuket have dropped by 30 per cent, although that has been offset by growth in greater Bangkok and other provinces which depend more on domestic consumers.
Hester said although foreign tourist arrival numbers had improved, total spending by foreign tourists in Thailand had not fully recovered due to a decline in Russian and European travellers who had high purchasing power.
He said Chinese travellers were the No 1 inbound market and they usually came in group tours, meaning individual travellers had less time to go out on their own and dine where they wanted to and had lower purchasing power.
Nevertheless, McThai plans to invest Bt1.3 billion in opening 33 new restaurants this year, including four branches that opened in the first quarter. It currently has 212 restaurants throughout the country. Its store expansion budget is more than double last year’s budget when it spent about Bt500 million opening about 20 new branches.
Chew said McThai missed its store expansion target last year due to delays caused by landlords who leased properties to the company.
Although the political turmoil caused McThai to significantly miss its revenue target last year, he said he still had great confidence in the long-term outlook for Thailand.
“Last year we invested Bt500 million. This year we will invest Bt1.3 billion. How could I have no confidence?” he said.
“I’ve been in Thailand for 28 years, during which there were many coup d’tats. Every time after that the economy picked up,” he said.
Petcharat Uthaisang, McThai chief marketing officer, said spending per bill at McDonald’s outlets increased by Bt3-4 during the first quarter, up from more than Bt100 per bill, partly due to it launching new products including its deep-fried dough stick.
“The feedback [on dough stick] is very good and our target was beaten. A proof [of how popular it is] is that we were running out of stock,” she said.
Beginning last month, McDonald’s started to include its McCafe menu in its 24-hours delivery service, allowing consumers to order coffee, tea, or other drinks from home.
Due to the maturity of Bangkok, McDonald’s expects the number of its upcountry branches to expand to 60 per cent of its total in the next 3-4 years, up from about 30 per cent at present. Of the 33 branches opening this year, half will be in upcountry. Of the 212 branches at present, 130, or about 70 per cent, are in Bangkok. Chew, a former boss of KFC in Thailand, joined Major Cineplex Group owner Vichai Poolvaraluck to take over the local franchise of McDonald’s in October 2007.