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McDonald’s announces growth plan for Hong Kong and China

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McDonald's will increase its number of stores in China and Hong Kong to 4,500 by the end of 2022, up from 2,500 currently, as part of a strategic partnership with Citic Ltd, CITIC Capital Partners and the Carlyle Group.Following the July 31 completion of the deal, a new venture set up by CITIC, CITIC Capital, Carlyle and McDonald's will become the US restaurant company’s main franchisee on the Chinese mainland and in Hong Kong for the next 20 years.The new partnership today announced a series of development initiatives for mainland China. Termed “Vision 2022,” the strategy aims to drive double-digit sales growth in each of the next five years by increasing the number of restaurants from 2,500 to 4,500, including delivery hub coverage of over 75% of restaurants, by the end of 2022, bringing unparalleled convenience to Chinese customers.Opening pace of new McDonald’s restaurants in mainland China is expected to progressively ramp up from approximately 250 per year in 2017 to 500 per year in 2022 under the new partnership.In addition, Vision 2022 includes plans to increase significantly McDonald’s restaurant portfolio mix in tier 3-4 cities to approximately 45% of all McDonald’s restaurants in China. Vision 2022 also includes an increase of “Experience of the Future” restaurants to over 90%, which will enable the brand to offer digitalised and personalised dining experience to more customers.With innovation hubs located in Hong Kong and Shanghai, McDonald’s will strengthen its brand leadership by enhancing the customer experience using menu innovation and advanced digital retail experience.The new venture paid US$2.08 billion for McDonald's China business under an agreement reached in January.“China will soon become our largest market outside of the United States. We are excited to join forces with CITIC and Carlyle for better localised decision-making to meet changing customer demands in this dynamic market,” said Steve Easterbrook, McDonald’s president and CEO.“Mainland China and Hong Kong are leading the global system in capturing new consumer trends such as delivery and digitalisation and its driving strong performance and growth momentum. I have great confidence in our new partnership to unlock the full growth potential of China. McDonald’s corporation will continue to play an active part in the China growth journey through our remaining interest and participation on the China board.”Zhang Yichen, chairman of the board of directors for the new McDonald’s China, commented: “The partnership will strengthen McDonald’s China’s entrepreneurial spirit, driven by ownership at the local level. It will also help us ensure first-class customer service and food safety while accelerating our growth in mainland China and Hong Kong.”

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