McDonald's expand in 'untapped' NZ

McDonald's plans to open nine more restaurants, continuing a period of growth. Photo / Brett Phibbs

Fast food chain McDonald's plans to develop nine new restaurants in New Zealand and hire an extra 4000 people.

Brett Watson, McDonald's development director, told the Property Council's retail conference in Auckland yesterday about its big growth strategy and how the global business viewed New Zealand as having untapped potential.

McDonald's is planning to open one of the nine outlets around Britomart in Auckland in time for the Rugby World Cup, he said.

Simon Kenny, McDonald's national communication manager, could only disclose two of the new locations.

"We have the new Balmoral and Britomart restaurants scheduled to open in the next two to three months. The Britomart site is at the bottom of the Mercure Hotel on the corner of Galway St and Queen St.

"The others are commercially sensitive at the moment but 170 restaurants by the end of 2012 is a target," Kenny said.

The past few months have already seen big expansion, mainly in the North Island.

McDonald's opened a free-standing outlet at Albany this month. In May, it opened at Lunn Ave, Mt Wellington. Last year, it opened in Taumarunui, Paeroa, Whangaparaoa, Frankton at Queenstown, Bunny St in Wellington, Te Puke, The Base in Hamilton, Mt Maunganui, Te Ngae in Rotorua, Constellation Drive on the North Shore and Richmond at Nelson.

McDonald's will soon introduce a new breakfast offering, Watson said.

Franchisees needed about $1 million cash to establish a McDonald's.

That would allow them to purchase the business for about $350,000 and have enough money to establish and run it.

McDonald's looked for a 20-year commitment from franchisees. It wants to grow the restaurant numbers per franchisee.

Watson described how McDonald's keeps an eye on the franchises, sending "mystery shoppers" to outlets to check standards, speed, greetings and experience.

McDonald's sought locations with high visibility, easy access, busy trade, high traffic volumes and prominent signage.

Properties fall into three classes: drive-throughs of varying store size to reflect different markets; instores with high pedestrian counts such as Britomart and Wellington's Bunny St; and foodcourts in malls.

But wage rates were a concern, Watson said.

Unite Union began negotiating with McDonald's and Burger King in March, seeking $15 an hour from McDonald's and better conditions including extended security of hours, recognition of full-time positions and pay allowances for graveyard shifts.

"We're paying $13 an hour and in the throes of settling with Unite Union soon," Watson said. "But it will be nowhere near $15 an hour and let me tell you, if we went up to that number the viability of our future development programme would be jeopardised."

BIG ORDER

Last year, McDonald's NZ served:
* 5.58m kg of beef
* 2.3m kg of chicken
* 15.6m kg of potatoes
* 85m buns and rolls
* 4.6m litres of milk
* 11m eggs

Source: McDonald's Restaurants (NZ)