After launching 10 new branches in 2006 McDonalds plans on expanding its business in Israel even more, with 12 new branches planned for 2007 and 12 more in 2008. At least two of these branches will only serve kosher food.
According to McDonald's Israel CEO Omri Padan, the chain is growing at 8-9 percent per year.
McDonald's currently operates 125 restaurants in Israel and plans to operate 150 by the end of 2008.
Padan reports that the expected turnover for McDonald's Israel in 2006 stands at over 400 million NIS (USD 93,283,500). In 2005 the turnover stood at only 380 million NIS (USD 88,619,400).
If it weren't for the war...
Padan also noted that the war in Lebanon cost the chain considerable financial damage, with an estimated loss of over 10 million NIS (USD 2,332,000) during 2006 due to the closing of 20 northern branches over the course of the summer – considered to be a crucial time in fast-food sales.
"If it weren't for the war," said Padan, "we would have reached a 414 million NIS (USD 96,548,5000) turnover." Padan estimates that the turnover for 2007 will reach 450 million NIS (USD 104,944,000) and 500 million NIS (USD 116,604,400) in 2008.
Padan attributes the chain's growth to the health revolution implemented two years ago by McDonalds.
Among other things the chain has switched to using fat-free Canola oil (rapeseed) which is low in saturated fat, buns with high percentages of vitamins and fiber, less calories in dressings and a nutrition pamphlet detailing the caloric values of items found on the menu and attaching a sticker marked with the nutritional values of every item sold by the chain onto the corresponding item.
Padan predicts that the trend of dining out will only increase in Israel, as it will in the rest of the world. Whereas in the rest of the world 18-22 percent of all meals are eaten out of the home, the Israeli figure stands at only 7-8 percent.
"The practice of dining out will evolve and this market will only grow, both for social reasons – young people will cook for themselves less, and for economic reasons – the quality of life will rise," explains Padan.