McDonald's faces up to 'long-term UK problems'

McDonald's is struggling to turn around its UK business despite investing millions to revitalise its brand.

The fast-food giant's third-quarter results suggested its European
business was improving, but that the UK market was continuing to
struggle.

It declined to give a break-down of the results, but claimed increased

costs of marketing, labour and beef in the UK had hit its overall

margins in Europe.

McDonald's chief financial officer Matt Paull said the issues in the UK
'may take longer to resolve'.

He added that the company was seeking growth in UK through new menu
items and improved communication on food quality, and said there were no
plans to cut marketing spend.

McDonald's plans to refranchise 50 of its outlets, which had been
franchised in the past before being bought up by the company. It also
aims to revamp up to 70 other restaurants this year.

The company reported a 6% fall in quarterly global profits to $735m (£415m).

It is in the third year of a turnaround plan that has seen it attempt to
refocus its business around healthy eating options, such as its Deli
Sandwich range, in answer to criticism that it has fuelled the obesity
crisis in the West.

McDonald's is expected to unveil a global active lifestyle campaign this
week, aimed at tackling poor consumer perceptions about the quality if
its food. Global advertising is expected to support an 'open policy'
that will allow consumers to track the ingredients of all its products.