The rising number of tourists in the wake of EU integration and investments worth 8m euros in the modernisation of outlets are expected to help McDonald's turnover and net projected income increase by 30% and 25%, respectively, this year. The fast-food network is hindered from more aggressive expansion by the shortage of commercial space and a migrating workforce.
McDonald's restaurants in the first nine months of this year posted turnover worth around 75m euros, 30% higher than in the same period last year, and by yearend is expected to generate turnover worth 90m euros and net income worth 8.5m euros.
"By late 2007, we will open another 2 restaurants in Cluj and reach 53 nationwide. The nine-month results and the figures estimated for the entire year are very good considering we've invested around 8m euros in the modernisation of restaurants this year," states Marian Alecu, general manager of McDonald's Romania, also in charge of operations in Bulgaria, Macedonia, Serbia, Croatia, Slovenia, Moldova, Georgia and Azerbaijan.
Alecu says sales of salads account for around 20% in turnover, while coffee and coffee-based products weigh around 12%.
The trend of McDonald's results also comes amid a favourable climate for the overall market, which registers a value of around 1.5-2bn euros and an annual growth rate of around 20%.
"Besides the market's positive trend, there were other factors that boosted our results. Custom duties were dropped in the wake of Romania's EU integration. At the same time, the number of tourists coming to Romania increased and when it comes to food many of them pick a place they are familiar with, such as McDonald's. We've also invested a lot in modernising our restaurants," Alecu adds.
Next year, the company will open between 5 and 8 outlets and hire around 800 individuals, with the total number of McDonald's employees expected to reach around 4,000.
"In terms of workforce, EU integration also created a setback. The opening of borders prompted a significant number of people to leave to look for jobs in other countries, which has generated major problems on the domestic workforce market. At the same time, the large number of greenfield investments in Romania has also managed to lure a large number of new employees, which makes it even more difficult for us to find new employees for our expansion," explains Alecu.
In Romania, McDonald's intends to operate 150 restaurants by 2012. Besides workforce problems, there is another factor that could make it more difficult for McDonald's to meet its expansion target, namely the serious shortage of commercial space.
To offset this, Alecu says the opening of malls is a prime development opportunity, while franchises could also aid McDonald's expansion.
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