Iceland's financial difficulties have caused McDonald's to close its three restaurants there at the end of this week. The company is unlikely to reenter the market for some time because high costs have pushed profit margins to unacceptably low levels.
Yet overall, turnover at the company's European and Asian restaurants is increasing, largely because of the popularity of specially-priced menu items.
Cash-strapped consumers are still eating out on a budget. The Times Online reports that sales of McDonald's Extra Value Meals during the past three months increased by 8.6 per cent compared with the same period in 2008.
Discussing the positive results, the Chief Executive of McDonald's UK tells the Telegraph:
What was encouraging was about three-quarters of this increase was down to more customer visits, not higher prices. The reality is that consumers are still finding life tough, and they are unforgiving of price rises.More European customers are trying breakfast at McDonald's and visiting McCafes for gourmet coffee, boosting market share, revenue and profits. Clearly, the company's strategy of growth by increasing sales per customer and restaurant -- rather than by opening new restaurants -- is a cost-effective approach to today's financial climate.
