The fast food giant reported a decline in operating profit despite a £238m increase in turnover, primarily due to a £48m investment and intangibles impairment. Inflationary pressures on food, paper, and utility costs further affected its operating profit.
For the year ending December 31, 2023, McDonald’s Restaurants Limited reported a total turnover of £1.8bn and a gross profit of £826m, down from £861m the previous year. Increased sales across its system contributed to the rise in turnover, although profit after tax fell from £129.7m to £35.5m during the same period.
McDonald’s deemed its business level and end-of-period financial position as ‘satisfactory’ despite challenges from inflation affecting both the company and the broader McDonald’s ecosystem. The company noted that declining retail footfall impacted its high street locations but mitigated this risk by investing in customer experiences across its restaurants, including high street, drive-thru, and delivery platforms.
Total sales for 2024 are currently outperforming those from 2023. In August, McDonald’s, celebrating its 50th anniversary in the UK, announced plans to open an additional 200 restaurants over the next four years. This expansion is part of the report titled McDonald’s at 50, reflecting a £1bn investment from McDonald’s and its franchisees in the UK and Ireland.
The rollout will include the testing of new restaurant formats such as ‘drive to’ sites and an increased focus on high street locations. Currently, around 89% of McDonald’s 1,500+ UK restaurants are operated by franchisees, and the group aims to see that number grow in the future.
