The Wall Street Journal-20080130-McDonald-s Steps Up China Plan

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McDonald's Steps Up China Plan

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BEIJING -- Fast-food giant McDonald's Corp. plans to accelerate its growth in China by opening 125 outlets in the country this year, 18% more than last year, senior executives said.

Half of the new outlets will have drive-through windows, as McDonald's seeks to further leverage China's status as the world's fastest-growing major auto market and give itself an edge against rival, Yum Brands Inc.'s KFC, which is far more popular in China. The expansion would roughly double the number of drive-through outlets McDonald's has in China.

Jeffrey Schwartz, head of McDonald's China business, said drive- throughs have a lot of potential. Roughly 28% of sales come from drive-through customers at the 60 Chinese outlets that offer the service. In the U.S., about 63% of sales are made at drive-through windows at McDonald's outlets that have them.

The drive-through service is called De Lai Su -- which translates roughly from Mandarin as "Come and Get It Fast." For the two years that ended in December, the number of drive-through outlets in China quadrupled, thanks in part to McDonald's partnership with the nation's largest gasoline retailer, Sinopec, to have outlets at some filling stations.

"In a lot of other countries, drive-throughs start slow . . . [but] China has embraced this concept immediately," said Tim Fenton, president of McDonald's for Asia, Middle East and Africa. "I'm wishing we had drive-throughs 10 years ago."