McDonald's occupies a leading position in the fast-food sector. McDonald's has more than 31,000 restaurants, which employ more than 1.5 million people in more than 119 countries on 5 continents. In order to provide the population of the countries in which they have restaurants, with the necessary number of jobs, the principal rule of McDonald's is to use mostly local products. Almost all of the products that are used in the restaurants of the network, McDonald's were produced in the country of origin.
The fast-food segment is stable or decreasing on the European markets. McDonald's is an exception: the corporation increases its share, while most competitors cannot.
That is because of good positioning and sales strategy. It provides good value for money in all of menu - both for 1$ food and for premium salads. The company is also involved in the development of franchising - about 80% of restaurants worldwide are working on the franchise. In addition, much attention is paid to ensure that the restaurant attracts the public's attention. The secret to the popularity of McDonald's is in its accessibility, low prices and service.
Today, McDonald's has its restaurants in every European city with a population approaching one million. In the capitals and cities of metropolitan areas they have five or even ten restaurants.
In 2014, in the largest cities of Europe, worked 393 European and international networks of public catering establishments and 10 major networks accounted for about 30% of the total network of catering establishments operating on the territory of Europe.
In recent years, the restaurant business has attracted more investors from different fields of business. The Japanese sushi bars occupy a significant proportion of the new opening of restaurants. For catering, it is important to have a steady stream of customers. That is why most of the restaurants located in the central areas, due to the attractiveness of the town center for entertainment of residents and visitors alike.
The network segment of European catering is significantly fragmented. Major networks combine their efforts, resources and reputation to work more effectively on the market. The trend of market consolidation will grow in the coming years. We can expect more mergers and acquisitions in the near future.
The crisis had an impact on the redistribution of shares between players of different price segments of the market. Thus, the income of upper price segment restaurants decreased by 20-30%, and the low segment increased by the same order. The relative stability is in the middle price segment, which will continue to grow after the disappearance of the consequences of the crisis.
The McDonald's network plans to open 240 new restaurants in the next year despite the crisis. Restaurants will be opened mainly in Spain, France, Italy, Russia and Poland.
Remarkable that the planned development program in Europe is the largest in the past 5 years: in recent years, "McDonald's" did focus on improving the return on existing restaurants.
The main problems that must be solved by networks of catering are the following: lack of staff, the increase in food prices and the weak development of franchising.
However, the main problem of the market is inability to find the room, which meets the necessary parameters and located in high traffic location.
This explains the interest of the owners of the industry to the shopping malls - the areas of high flow of visitors.
In order to compete successfully in the European fast-food market the McDonald’s corporation should follow such specific recommendations:
1. Reduce costs. About 45 percent of the premium institutions have already switched to the domestic raw materials and removed some toppings. Nearly two-thirds of low segment cafes and restaurants decreased meat and fish ingredients.
2. Reduction of the trade margin. Restaurants in Europe in order to attract visitors reduce the trading margin, offer so-called anti-crisis menu. The average cost of a business lunch today is 10-15 Euros.
3. Review the staff-list. For example, in Munich, almost a third of fast-food companies have reduced the number of employees.
4. Reduce the budget for promotion. Restaurateurs believe that due to the decrease in consumer activity of the target audience, these costs will be wasted money.
5. Use the innovative “green” programs. Such energy-saving programs help to gain the customer share. Especially in Europe where people care about the environment and ecology.
6. Increase the availability of the brand. One of the key advantages of the McDonalds are its price and location. The cost of food in the restaurant is relatively inexpensive, memorable and thrilling experience, kind and cheerful atmosphere - all this creates a good mood on visit.
The development potential of the fast food market in Europeis estimated at 14.5 - 15 billion USD, it follows that at the current pace of development and penetration, the market is far from saturation. Potential was counted with accounting the dynamics of the increase in market volumes for previous periods, before the crisis (according to official information, the market grew by an average of 20% per year), as well as on the basis of analytical data that the market is saturated with fast food in Europe only by 60-65%.
The saturation of the European market of fast food, according to analysts, will come no earlier than 2020. Until that time, the market will attract investors.
