ShekouDaily | February 21, 2019
I have to admit, the second McDonald’s location that opened on January 31st, 2019 in Sea World, Shekou, Shenzhen, is a beauty.
Sitting at its outdoor seating area across the street from the Statue of Nuwa, and the Sea World Culture & Arts Center, gazing at the palm trees swaying in the breeze, makes you (kind of) feel like you’re at a holiday resort. All that’s missing is the beach.
The fact that Sea World already has a McDonald’s less than 200 meters away, makes me wonder though… Do we really need this here?
Restaurant owners have been complaining for years that the area is overrun with too many bars and restaurants. Why would McDonald’s open a second so close? The luxury Imperial Park complex; which opened just across Wanghai Blvd from this new location, is nice, but it still seems fairly empty to justify a McDonald’s. My first thought was maybe this is one of those new “Next” McDonald’s that popped up in Hong Kong (1), or maybe there is something very different about this one; so I went down to have a look.
Unfortunately, it isn’t. The menu is exactly the same as the other in Sea World, the one about 600 meters away on HaiChang Street, and the thousands of others across China. The main differences between this one and the other in Sea World is that it does not have its own bathroom (they direct you to the shared bathroom in the mall), there’s no McCafe, it isn’t open 24 hours (it’s open from 7am to 11pm), and the service from the fresh, attentive, and bright-eyed staff is much better.
So what is the reason? Unfortunately, it doesn’t look like McDonald’s makes public how exactly it chooses locations; however, here are some interesting points that may help explain it…
According to the FastCompany article entitled: “How Fast Food Chains Pick Their Next Location,” fast food chains analyze their own demographic data and or others in Geographic Information Systems (GIS) and compare all sorts data; such as auto traffic, consumer demographics, safety information, commercial mix, and other factors. (2) For example, Starbucks global market planning manager Patrick O’Hagan, said Starbucks uses an in-house mapping and business intelligence platform called Atlas to determine where to open new locations around the world; including new branches in China. The platform evaluates nearby retail clusters, public transportation stops, and neighborhood demographics. (2)
McDonald’s, which sold 80% of its China operations to a consortium led by China’s CITIC (0267.HK) and the private equity firm Carlyle (CG.O) for $2.1 billion (3), plans to double the number of restaurants in China in the next five years, eventually surpassing Japan as the hamburger chain’s second-biggest market outside the U.S. The company expects to have 4,500 restaurants in China by 2022, up from 2,500. There are about 37,000 McDonald’s restaurants worldwide and more than 14,000 in the U.S. (4).
According to the McDonald’s Corporation’s franchise website (5), the ideal site today might include the following characteristics:
- 50,000+/- sq. ft.
- Corner or corner wrap w/signage on two major streets.
- Signalized intersection.
- Ability to build up to 4,000 sq. ft.
- Parking to meet all applicable codes.
- Ability to build to a minimum height of 23′ 4″.
I’ll leave you with an interesting map from over a decade ago showing the McDonald’s locations across the U.S. Back in 2004, no one, even in the most remote locations of the country, was much more than a hundred miles away from a McDonald’s. (6)
References:
(1) McDonald’s Next debuts in Hong Kong
(2) How Fast Food Chains Pick Their Next Location
(3) Wall Street Cheers McDonalds Sale Deal in China
(4) McDonald’s Plans to Nearly Double Restaurants in China
(5) McDonald’s Corporate Website – Franchise Information
(6) The Fries that Bind Us