This story is a part of NRN’s International Top 25, an annual look at the 25 largest restaurant chains and companies based outside of the United States and Canada based on their worldwide foodservice sales. Sales and figures were calculated by London-based Euromonitor International.
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Even the savviest of U.S.- and Canada-based operators are finding a mixed bag of experiences in international markets, as some combine opportunities for growth with challenging economic environments.
The top five restaurant chains based in the United States or Canada by international systemwide sales, or sales outside their home countries, had combined fiscal 2012 international systemwide sales of $91 billion, a 4.2-percent increase from the preceding year. In comparison, the group’s aggregate sales increased by 15.7 percent in fiscal 2011.
On average, the top five chains — McDonald’s, KFC, Pizza Hut, Burger King and Subway — grew international sales by 6.9 percent and 15.4 percent in the latest and preceding fiscal years, respectively.
Combined, the top five chains ended fiscal 2012 with average unit growth of 8.6 percent.
• Chains by sales, growth
• Chains by worldwide units, growth
• Companies by sales, growth
• Chains by estimated sales per unit
The roster of top-five companies looks at systemwide sales from chains owned by the entities and this year is made up of McDonald’s Corp.; Yum! Brands Inc., parent of KFC, Pizza Hut and Taco Bell; 3G Capital Partners Ltd., majority owner of Burger King; Doctor’s Associates Inc., franchisor of Subway; and Starbucks Corp.
Collectively, their concepts saw fiscal 2012 international systemwide sales rise 5.2 percent, to $96.6 billion, after increasing by 15.9 percent in fiscal 2011.
Several of the top-five chains and companies faced a tough road this year.
McDonald’s for the first three quarters of 2013 reported same-store sales declines of 0.3 percent and 1.7 percent in its two largest international divisions: Europe and the Asia-Pacific, Middle East and Africa region, respectively. A third, smaller region that includes Latin America and Canada had same-store sales growth of 7 percent for the same period.
The international challenges, as well as a near-flat U.S. performance, led McDonald’s Corp. president and chief executive Don Thompson to concede that “the current environment continues to pressure results.”
“We remain confident in our ability to drive sustained, long-term profitable growth through our global growth priorities,” Thompson added in a statement.
McDonald’s has no choice but to address the challenges of overseas markets, as it generates massive numbers from overseas — 59.5 percent of its worldwide systemwide sales, 68.3 percent of its corporate revenue and 56.8 percent of its operating income during the nine months ended in September.
Yum is even more dependent on foreign business.
International locations drove 59.2 percent of Yum’s aggregate 2012 global systemwide sales from all brands, but other key metrics are even more skewed to the international scene. For the nine months ended in September, 76.6 percent of Yum’s total revenues came from outside the U.S., with 52 percent derived from China, alone. International operations accounted for 68.7 percent and 87.4 percent of Yum’s allocated and overall operating profit, respectively.
Yum chairman and CEO David Novak recently highlighted the positive runway of international growth, even as Yum revised downward its full-year guidance. The change in expectations was driven, in part, by a 16-percent decline in same-store sales in China for the first nine months of 2013. Yum’s business in that country was challenged by a supply chain controversy in late 2012 and a May outbreak of avian flu, both of which put consumers on edge.
Still, Yum said it would open at least 700 units in China and another 1,150 in other markets outside the U.S. this year.
“We remain on the ground floor of global growth and continue to have unparalleled development opportunities,” Novak said in a statement.
International challenges also confronted Starbucks, which last month reported record results for the fiscal year ended in September, helped by same-store sales growth of 9 percent in its China and Asia-Pacific region. But same-store sales in the company’s Europe, Middle East and Africa region were flat for fiscal 2013, the second consecutive year of no improvement.
This article has been revised to reflect the following correction:
Correction: Nov. 19, 2013 An earlier version of this article incorrectly cited results for Starbucks Corp.’s fiscal 2013, ended in September, as quarterly results.
Contact Alan Liddle at [email protected].
Follow him on Twitter: @AJ_NRN
