Upcoming McDonald’s Corp. (NYSE: MCD) earnings may not be the most important news about the company. Rather, its move to have 10,000 stores in China, a country with almost four times the population of the United States, could be the key to a sharp rise in revenue.
McDonald’s has about 13,500 stores in the United States, but the company’s business in America goes back to its founding in 1940, so there is some market saturation. The fast-food king has about 36,000 stores worldwide today. (See the 16 countries with unique McDonald’s menus.)
According to The Wall Street Journal, the McDonald’s 10,000 goal has an end date of 2028. Reaching its goal is not just about adding new locations. It needs to buy out, at least partially, such current owners as Citic, which the Chinese government owns, and private equity firm Carlyle Group.
McDonald’s China strategy is a primary key to its future. While most of its stores are in the United States, the balance is in Europe. Except for Japan, its footprint in Asia is modest.
Many huge consumer-based U.S. companies rely on or hope to rely on China for rapid growth. This is true for firms in several industries, from carmakers like Tesla to retailers like Walmart. Without China, they all would have much lower revenue today.
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