NZ McDonald's posts lift as global empire struggles

Sales are sliding at McDonald's - and the company's new boss is planning a big turnaround. Photo / Getty Images

Kiwis are chomping their way through more McDonald's burgers, with the fast food giant's New Zealand arm posting a lift in annual revenue as the business grapples with falling sales globally.

The local division of the Golden Arches has reported a 2 per cent lift in revenue to $221 million for the 12 months to December 31, according to financial statements lodged with the Companies Office.

Net profit for the year was basically flat compared with 2013, at $30.8 million.

However, those figures only reflect the sales of company-owned stores and other revenue including royalty fees from franchisees.

Independent franchisees run around 80 per cent of McDonald's 164 New Zealand outlets.

Including sales from stores operated by franchisees, McDonald's total sales in this country is likely to be in the region of $700 million.

The financial statements show McDonald's New Zealand paid $30.5 million in dividends to its US-based parent company, McDonald's Corporation, last year.

The local result comes at a challenging time for the company's global operations.
Illinois-based McDonald's Corporation reported a 2 per cent drop in revenue, to US$27.4 billion, for the 2014 calendar year.

Its shares have fallen almost 9 per cent since May last year to close at US$94.30 today.

McDonald's has been facing competitive pressure in the Northern Hemisphere from the rise of "fast casual" restaurant chains such as Chipotle Mexican Grill and Shake Shack.

Local fast casual operators like BurgerFuel and Mexicali Fresh are also becoming increasingly popular with New Zealand consumers.

McDonald's new global chief executive, Steve Easterbrook, unveiled a major restructuring plan last month that aims to improve the Golden Arches' poor recent performance.

The company is hoping to save US$300 million a year by 2017 by selling more than 3000 company-owned outlets to franchisees, which would increase the proportion of franchise-run outlets globally to 90 per cent from around 80 per cent currently.

McDonald's New Zealand managing director Patrick Wilson was unavailable for comment today.

Company spokesman Simon Kenny said there had been "no material impact" from the restructuring in this country so far.

"It's been business as usual since the announcement," he said.

Restaurant Brands - whose businesses include Pizza Hut, KFC and Carl's Jr - posted a 9.2 per cent lift in sales, to $359.5 million, for the year to March 2.

Its profit jumped 19.4 per cent to $23.8 million.