U.S. Chains Eye China for Growth

Restaurants push for development in the country as China’s economic growth continues to outpace the U.S.
August 07, 2019

BEIJING—The U.S. trade war with China continues to heat up, but that hasn’t damped U.S. restaurant chain expansion in the country, CNBC reports. While China’s economy has slowed because of the tariffs, it’s still ahead of the United States.

“When you look at that potential, it won’t deter American brands from pushing into China,” said Aaron Allen, who owns Aaron Allen & Associates. Allen also pointed out that in times of economic uncertainty, fast-food chains usually prosper.

McDonald’s has plans to build more than 400 stores in the country by the end of this year, with a five-year plan to increase its units to 4,500 by 2022. The Chinese locations have experienced growth in sales and traffic during the second quarter of 2019. “It’s incredibly competitive. You’ve seen the pace at which other people are expanding, but it is a huge market,” said CEO Steve Easterbrook. “The emerging middle class, the greater affordability of the mass population there is heading toward Western [quick-service restaurant] type of average checks and affordability.”

Restaurant Brands International will franchise 1,500 Popeyes Louisiana Kitchens in China over the next 10 years. KCF has long had a strong presence in China with more than 6,000 locations, while Burger King has 1,000 locations.

Tim Hortons coffee chain will build 1,500 units in China over the next decade, as well. Meanwhile, Starbucks views China as a long-term growth opportunity, similar to the United States. Starbucks has more than 3,900 stores and will increase to 6,000 by 2022.

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