McDonald's European Makeover Boosts Sales At Fastfood Chain

Berlin, Germany (AHN) - Even though McDonald's outlets in Europe only comprise one-fourth of U.S. stores, in 2007, income from the fastfood chain's European operations reached $8.9 billion. European sales toppled the U.S. as the largest source of revenue after American operations only earned $7.9 billion last year.

Analysts said the trend is likely to continue in the coming months as Americans tighten their belts as the country goes through an economic slowdown. Steve West, restaurant analyst of Stifel Nicolaus, forecasts McDonald's U.S. sales to grow by only 3.4 percent for the second quarter, while it would jump by 9 percent in Europe. The 2nd quarter earnings are expected to be released on July 23.

West added income outside the U.S. is expected to comprise 55 percent of McDonald's revenue.

Dennis Hennequin, head of McDonald's European operations, attributed the rise in income in the continent to the major makeover of over one-third of its 6,400 outlets in Europe.

He said majority of U.S. diners prefer to buy McDonald's hamburgers and fries from the store and eat it while on their way to school or office, with 70 percent of their income from drive-throughs. "In Europe it's more about the experience... It's convenient and a destination place at the same time," Hennequin said, quoted by Spiegel Online.