McDonald’s (MCD.NYSE) said it will raise investment in China by 25% and add 150-175 restaurants to its current 1,100 outlets this year, encouraged by the country’s strong economy and growing consumer base. The fast food chain is also planning to offer free wireless internet access this year as well as refit 80% of its existing restaurants in a bid to entice more customers.
China’s fast food market continues to be an attractive destination for restaurant chains, but it is also becoming increasingly competitive. Many domestic fast food options are appearing on the market, such as the rapidly growing Kungfu Catering Management, which directly target local tastes.
Yum! Brands (YUM.NYSE) has also been busy ramping up KFC and Pizza Hut store numbers throughout the country. The company opened 509 new restaurants in China during 2009 and saw its fourth quarter sales climb 17% year-on-year, compared to a 15% drop in US sales. With the likes of Hong Kong-listed Ajisen (China) Holdings (0538.HK) serving ramen-based meals for under US$3, foreign fast food chains like Yum! and McDonald’s will need to offer more than just Wi-Fi if they want China revenue to continue its role of propping up annual sales figures, with pricing structures and menus certain to come into the equation.