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Start-Ups Take Heed! How McDonald's Is Beating The Recession

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Start-Ups Take Heed! How McDonald's Is Beating The Recession

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Why aren't businesses queuing up to learn the secrets of their business model? They're not just merely surviving, but profiting from the economic downturn.

TOM TAINTON reports on how the fast-food giants are defying the economic downturn.

The credit crunch looms large over almost every sector of the economy, and the restaurant industry is feeling the pinch more than most. Last year saw a 22.5% drop in consumer spending to the staggering tune of £5bn. But fear not, yet to succumb to the economic chill is the fast-food giant McDonald's who announced plans to open 1,000 new restaurants in 2009. No stranger to controversy, the chain has shrugged off government health bills, environmental protests, and an army of the critically obese, filing legal proceedings at every opportunity. Can anything stop this calorific juggernaut? Well, apparently not, no.

Despite revenue losses of £180m, McDonald's experienced 5% growth in same-store sales profiting from dirt-cheap prices, and the remarkable omnipresence of an outlet around every corner. In other words, the food's crap, but, hey, you ain't gonna be able to ignore us. The company defied the global rising costs of ingredients by actually reducing their total operating costs and expenses by 8%. This begs the question - why aren?t businesses queuing up to learn the secrets of their business model? They're not just merely surviving, but profiting from the economic downturn. Hell, McDonald's even had the cheek to bump up the prices of its double cheeseburger and still the hungry masses came flocking.

The chain plans to invest £2.1bn in opening the new locations, creating 4,000 'McJobs' in the process. The company attributes their remarkable success to the "redesign of restaurants and staff uniform, and the transition to healthier food". Sure, that and the fact that lunch in another restaurant will be twice as costly. Let's face it, a customer knows what to expect. It's familiar, it's quick and more importantly it's not going to bankrupt you. The bigwigs down at McDonald's HQ are smart cookies; they've seen an opportunity to take advantage of us weary, penniless folk and they've grasped it with both hands. The old business principle of the fittest surviving is truer than ever, although in this case one might say it's more survival of the fattest.

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