Upsized: McDonald’s expands in the Emirates
Watch out for your waistlines – McDonald’s is supersizing its retail offering in the UAE.
Its Middle Eastern franchisee, Emirates Fast Food, is set to open 11 new stores across the country.
The move will increase the company’s UAE workforce by 19 per cent, while lifting the total number of McDonald’s outlets in the country to 119.
The announcement from the world’s biggest fast-food restaurant chain follows an influx of burger openings from companies such as Fatburger and Grand Central.
“There’s a big market for burgers in Abu Dhabi and Dubai – it’s the place to open up the burger joint,” said Candice Burje, the regional manager at Grand Central.
McDonald’s already reaches a large customer base in Dubai and Abu Dhabi, but the aim is for the company to become more accessible to people living in other emirates, a spokesman for the company said.
The company’s revenues grew 13.8 per cent in the Asia-Pacific and Middle East region over the past three years, compared to 3.53 per cent growth recorded in the much more competitive United States food retail sector and 5.3 per cent growth in the EU, according to data from Bloomberg.
But McDonald’s is aiming to grow its business just as the UAE’s fast food market becomes increasingly fragmented.
The UAE’s fast food sector increased in value by 15 per cent last year over 2012, according to data from Euromonitor International. At the same time, the market became considerably more competitive, with 12 per cent more outlets opening that year.
Kuwait Food Company (Americana), Emirates Fast Food, Subway Arabia, First Food Services and Galadari Ice Cream accounted for a 46 per cent market share by value in 2012, according to research by Euromonitor International.
These companies are franchisees of a number of major international fast food chains: Americana, for instance, franchises KFC, Baskin Robbins, Pizza Hut and TGI Friday’s, among others.
The company faces competition from high-end and healthy food restaurants that are targeting affluent, health-conscious consumers.
“Some healthy restaurants are picking up [in popularity],” said Ms Berje, “Young people between 24 and 35 are looking for the healthier meal.”
But healthy restaurants are not affecting the local fast food chain Burger Hut’s market share, saidUsman Abdulla, the company’s operations manager, because the restaurant offers healthy options, he says.
And Ms Berje is unconcerned about competition from McDonald’s: “We offer different quality at a different price,” she said.
In recent years, McDonald’s has added salads and expanded its range of “McCafes” in a bid to ward off competition from coffee shops and other restaurants.
“We are planning to further expand [McDonald’s] geographical coverage in 2014 to other Emirates,” said Rafic Fakih, managing director of McDonald’s UAE.
Updated: February 2, 2014 04:00 AM