Focus on burgers boosts UK profits at McDonald’s

The UK arm of fast-food giant McDonald’s saw profits surge in 2006 as its strategy of focusing on burgers rather than healthier options paid off.

The group, which has more than 1,100 outlets in the UK, saw operating profits rise by 27% to £54.3m in the 12 months to December last year (2005: £42.7m), according to accounts filed at Companies House.

The figures vindicate chief executive Steve Easterbrook’s decision, when he joined in April 2005, to overturn previous policy and concentrate on burgers.

His predecessor Peter Beresford had tried to boost growth and improve the reputation of McDonald’s – in the doldrums following criticism by activists and the film Supersize Me - by offering healthier options with salads and fruit.

But Easterbrook admitted that pushing salads had “alienated” core customers and suggested the previous regime had been overly apologetic about the McDonald’s brand.

Overall, pre-tax profits at the UK chain fell to £28.4m in 2006 from £39.1m the previous year.

This drop was caused as the company increased interest payments on a loan arranged to pay dividends to the US parent company for tax reasons, a spokeswoman explained.


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By Daniel Thomas

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