McDonald’s Malaysia takes a shot at RM8b coffee industry

Revenue of McCafé continues to be on the uptrend, according to MD


McDONALD’S Malaysia is expected to enjoy a bigger slice of the fastgrowing RM8 billion coffee industry in Malaysia, with its McCafé business expanding 50% annually on average since 2012.

The fast-food operator has so far invested nearly RM10 million this year on new McCafé outlets and products, with similar provisions expected over the next few years that would further the chain’s growth.

The plan includes the rollout of drive-thru and delivery services for McCafé products in 2018, as well as the addition of 10 to 15 outlets per annum.

I am sure if we continue to build on the momentum, our market share will increase, says Azmir

“The coffee industry’s growth rate is around 30% a year and we have been growing faster at an annual rate of 50%. I am sure if we continue to build on the momentum, our market share will increase,” McDonald’s Malaysia MD and operating partner Azmir Jaafar (picture) told reporters in Shah Alam recently.

Azmir said despite the existence of many coffee outlet chains in the market, the opportunity for growth remains ample. Currently, McCafé represents only 1% of the market share.

“We have over 200 McCafés nationwide. As the coffee culture continues to grow, we will look to seize these market opportunities by expanding our footprint and innovate our menu offerings in the coming years,” he said.

Azmir added that the revenue of McCafé has also continued to be on the uptrend. With products selling at half the price of its competitors, the fast-food chain is anticipated to create a new wave of espresso-based coffee consumers.

On its restaurants, Azmir said McDonald’s Malaysia is expected to launch 12 to 14 new stores next year, and remodel 25 others with a capital expenditure of RM118 million.

The development is part of a RM363 million “aggressive three-year accelerated plan” to open 33 new restaurants and refurbish 86 existing outlets through 2019.

Over the long-term period, McDonald’s Malaysia has committed RM1.4 billion to double its store count to 450 nationwide.

The plan to expand its network of stores comes after Lionhorn Pte Ltd, a unit of Jeddah-based consortium Reza Investment Co Ltd, was made master franchisee for McDonald’s in Malaysia and Singapore last December.

This was in line with McDonald’s Corp’s move to refranchise 4,000 restaurants globally by end- 2018, after same-store sales in the US fell in 2012 — the first in nine years.

Indonesia, Thailand and the Philippines are also operating under a master franchise licence.

Lionhorn has franchisees for nearly 100 McDonald’s restaurants in parts of Saudi Arabia.

Azmir and Kenneth Chan lead local daily operations in Malaysia and Singapore respectively.

McDonald’s Malaysia is confident of another round of double-digit growth this year, following a record 16% revenue jump in 2016.

It currently has 264 outlets with over 12,000 employers serving 13.5 million customers on a monthly basis.