McDonald’s Is Planning To Close Hundreds Of Restaurants

McDonald’s Corp. plans to close hundreds of U.S. restaurants. For the first time in more than 45 years, the world’s biggest hamburger chain plans to close more stores than it opens.

According to a review of Security and Exchange Commission filings by McDonald’s, the Associated Press revealed the fast-food restaurant giant has not closed more stores than it opened since 1970.

As McDonald’s appears to be faltering, competitors like Wendy’s, Sonic, Chipotle, and Burger King are experiencing soaring sales, while reducing McDonald’s Corporation’s dominance in the fast-food industry.

In an Associated Press interview, John Gordon, a restaurant industry analyst with Pacific Management Consulting Group says, “McDonald’s is such an internally focused organization; it’s a situation where you don’t have a fresh perspective coming in.”

In April, McDonald’s said it would be closing close to 350 restaurants, primarily in the U.S., China, and Japan. The future underperforming restaurants McDonald’s plans to close this year are in addition to 350 previously announced closings in other continents around the world.

Even though McDonald’s is closing hundreds of restaurants, the fast-food giant remains the country’s biggest hamburger chain. According to the industry tracker Technomic, they have more than twice as many restaurants as No. 2 Burger King.

Subway, with about 27,000 stores, has the most locations in the country in comparison to all fast-food chains; however, they do far less business than McDonald’s does.

McDonald has declined to comment on the last time it reduced its U.S. store base, according to the Associated Press. Nevertheless, considering the company’s rapid expansion in its early years, it is likely McDonald’s had not experienced this drastic reduction of store bases since Ray Kroc founded the company in 1955.

Even though McDonald’s is preparing to close hundreds of restaurants, the company is still growing globally. The fast-food restaurant giant plans to add 300 more stores to their worldwide total of more than 36,000.

McDonald’s former chief communications officer, Mike Donahue, said McDonald’s probably has not reached its limit in the U.S. adding, “The only thing that stops growth is relevancy to the customer.”

Prior to leaving McDonald’s in 2006, Donahue said, “What they’re doing is pruning the tree.” When the company closed underperforming restaurants in the past, it would open new restaurants in better locations.

This year’s closings appear to be just one more way McDonald’s is trying to strengthen its base of stores and maintain their dominance in the fast-food industry.

[Featured image via Justin Sullivan/Getty Images]