McDonald’s Pledges £1B Expansion As U.S. Operators Target UK Stores
U.S. food and beverage giants McDonald’s and Starbucks might be struggling with weak performance in China and challenges in their global operations in key regions, but one market just keeps on delivering: the UK.
Demand for takeaways continues, driven by a return to office work and those based at home treating themselves. The UK food-to-go market is predicted to expand by 40% by value by 2028, according to figures from grocery industry body IGD.
This year, both companies will join a host of food-to-go chains in bolstering their physical presence and investing in logistics and distribution as the postpandemic lull in eating out and home delivery gives way to a new surge in demand.
McDonald’s has announced that it is to open more than 200 restaurants across the UK and Ireland over the next four years, creating about 24,000 new jobs in its largest expansion programme in the UK in more than 20 years, backed by a £1B investment.
The company, which this year celebrates 50 years since it opened its first UK store in Woolwich, south London, said it will focus on high street locations as it builds on the 1,435 restaurants it already operates across the country.
The new outlets will include trials of new formats such as smaller sites and what McDonald’s called “Drive to” restaurants.
Earlier this year, coffee chain Starbucks announced plans to open 100 more UK stores as it seeks to build on strong sales growth last year, despite wider global issues at the business. In the 12 months to October 2023, it achieved its target to open 100 UK stores, and following further investment in its drive-thru network, it ended the period with 1,168 UK stores.
It has since expanded to 1,260 outlets across the country, with new outlet growth focused on its 340 UK drive-thru sites, plus high-footfall city centre locations.
As part of its growth plans, last October Yum Brands’ KFC division acquired more than 200 KFC restaurants from forecourt specialist EG Group in the UK and Ireland. KFC UK and Ireland has around 1,050 outlets and has announced plans for another 500 restaurants across the market by 2030.
But those established giants will see the market becoming increasingly competitive, with a host of chains from the U.S. pledging growth, including Dave’s Hot Chicken, Chick-fil-A, Popeyes, Five Guys, Wingstop, Shake Shack and Carl’s Jr.
Meanwhile, one quintessentially British brand is keeping the U.S. invasion at bay. This summer, Greggs opened its 2,500th shop in a petrol forecourt at Sainsbury's Cobham as it targets an eventual estate of more than 3,000 shops in the UK. In 2023, it overtook Subway as the country's largest sandwich operator, and this year it plans to open between 140 and 160 new shops, with a focus on expanding its presence in travel hubs and roadside locations.
In line with its growth plans, Greggs has entered into a lease agreement for a new frozen production and logistics facility at SmartParc Segro Derby, which is expected to open in late 2026.
It has also announced plans for a new 312K SF national distribution centre at Symmetry Park, Kettering, in partnership with Tritax Symmetry, expected to be operational in the first half of 2027.
