Although McDonald’s brand is in great shape, the CEO said there’s more it can accomplish. In early January, the company announced an evolution of its Accelerating the Arches plan, including the addition of restaurant development to go alongside the three D’s of digital, delivery, and drive-thru.
For McDonald’s, the formula is simple—strong same-store sales justify increased unit expansion, Kempczinski said. The U.S. ended 2022 with 13,444 restaurants, good for a net gain of six stores. It’s the first time in eight years that McDonald’s domestic business has seen positive unit growth year-over-year.
All of that expansion came from company-owned units. McDonald’s ended last year with 12,751 U.S. franchised outlets, a net decrease of 24 year-over-year. Meanwhile, the domestic corporate footprint grew by 30 units from 663 to 693.
“Around unit growth versus comp growth, we have to walk and chew gum,” Kempczinski said during the company’s Q4 earnings call. “It's not one or the other. It's the two of them in combination. And I think the big difference is when you want to be growing units is when you've got strong comp sales because that reflects the underlying health of the business. I'm always very leery when I see someone out there putting a strong unit growth number without strong underlying comp sales because that's historically not been a good recipe in our industry. And so for us, I think we've got, as you've seen in our results, strong comp sales.”
The brand’s goal is to accelerate the pace of restaurant openings to better capture demand driven by its Accelerating the Arches strategy. McDonald’s is the largest restaurant in the world in terms of unit count and sales, but it still sees whitespace opportunities in many major markets. This includes testing prototypes, such as the one in Fort Worth, Texas, which features a mobile order lane where customers receive orders via a food and beverage conveyor.
The burger chain finished 2022 with 40,275 stores globally, or net growth of 244 restaurants year-over-year. International Operated Markets (i.e. France, Canada, the U.K., Australia, Italy, and Spain) had 10,103 locations, down 682 stores compared to 2021 because of Russia. International Developmental Licensed Markets (i.e. China, Japan, Brazil, and South Korea) had 16,728 stores, up 920 units from the previous year.
McDonald’s will spend between $2.2 billion and $2.4 billion on capital expenditures in 2023, and about half of that will go toward new unit openings. Globally, the category leader will open roughly 1,900 restaurants, with more than 400 of those openings coming in the U.S. or International Operated Market segments. The remaining 1,500 restaurants, including approximately 900 in China, will be in International Developmental Licensed Markets. McDonald’s estimates 4 percent unit growth this year, which means about 1,500 net new openings.
“I feel very good about the outlook. And so that now gives to me permission to put on top of that some unit growth," Kempczinski said. "But we need to be very smart about where and how we do that. And I think sometimes in the past, we were looking at just putting units and looking at an absolute number and not maybe looking at the quality of the site. And so that's why we want to take some time this year to make sure we feel confident about the exact number, the pacing, the quality of the site so that when we do roll that out that we've got the ability to continue to drive both comp sales as well as unit growth."