McDonald's Corporation (MCD) To Double China Stores By 2022

Workers sit outside a McDonald's restaurant in Nanchang China's Jiangxi province

McDonald's will nearly double its number of restaurants in China over the next five years as it continues to restructure its business following a worrying dip in sales.

McDonald's sales took a hit in recent years as tensions over the South China Sea dented United States companies' earnings in China.

McDonald's Corporation's expansion in China also has a focus on enhancing customer experiences.

Earlier this year, McDonald's sold almost all of its Hong Kong and China business to CITIC Ltd and Carlyle Group for around $2.1 billion.

Under its deal with the two companies, which last week was given regulatory approval, CITIC holds 52% while Carlyle has 28% of the Hong Kong and China McDonald's business.

"China will soon become our largest market outside the United States". That would make China the second largest market for the company after the USA, replacing the current No.2, Japan.

KFC's wide presence in China appears to have bolstered the confidence of McDonald's investors in the new expansion plan, industry insiders said.

Zhang Yichen, the new chairman of McDonald's China, said restaurant ownership at the local level will foster entrepreneurial spirit within the company.

McDonald's will open 2,000 new restaurants in mainland China and Hong Kong by the end of 2022, bringing the total number to 4,500.

China drove positive results in McDonald's second quarter.

"...they absolutely shared our appetite to transform the McDonald's experience and the brands".

Innovation hubs, which will be responsible for menu innovation and advancing the digital retail experience - will be established in Hong Kong and Shanghai.

Its China business also suffered a blow in 2014 after a food safety scandal involving one of its meat suppliers.

McDonald's is betting that Chinese consumers are hungry for more.

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