McDonald's is expanding its presence in China while many international brands are reducing their operations in the country. The fast-food chain plans to increase its number of stores in mainland China from over 7,700 at the end of 2025 to 10,000 by 2028, making it a significant source of unit growth for the company.
This expansion is notable as it contrasts with the struggles faced by brands like Starbucks, Nike, and LVMH in the Chinese market. McDonald's has reported a 3.4% increase in same-store sales in its international developmental licensed markets segment, which includes China. A majority of McDonald's operations in China are owned by Trustar, a private equity unit of Citic Capital.
The brand's nostalgic appeal, stemming from its first store opening in 1990, continues to resonate with consumers, as evidenced by the popularity of its reintroduced strawberry and vanilla milkshakes. These milkshakes, which had been discontinued in 2014, have been made available again in select stores, tapping into the nostalgia of consumers like Yue Ma and Zhu Ming.
Despite the rise of local brands, McDonald's has maintained its reputation for quality and affordability, offering value through its menu options, including a budget-friendly combo meal. This strategy appears to align with the changing consumer mindset in China, where value is prioritized over mere pricing, according to Tracy Dai from China Skinny.
Overall, McDonald's ability to adapt and leverage its brand heritage positions it favorably in a competitive market