McDonald s Economic Footprint in Europe: Did you know that...

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1 McDonald s Economic Footprint in Europe: Did you know that...

2 1 Introduction Introducing our report McDonald s salaries Salaries and wages paid by McDonald s Europe and its franchisees are partly reinvested in the regional/local economy. In 21, these had an estimated total impact of 7.6 billion in the European Union. In 1971, McDonald s opened its first restaurant in Europe, in the Netherlands. Forty years later, together with our franchisees, we operate around 7, restaurants in countries in Europe, employing approximately, people and serving over 13.6 million customers a day. So McDonald s is now a significant part of the European landscape. However to mark our th anniversary we wanted to objectively quantify our contribution to the European economy for the first time. McDonald s Europe reinvestment in its operations: in million Euros London Economics undertook this analysis for us. They examined our economic footprint in Europe, covering contribution to raw material sourcing, job creation and business opportunities via our franchising model. The London Economics analysis proves McDonald s has a significant and positive impact on the European economy and we re proud that our success results in the creation of jobs, growth and wealth in Europe. In fact, London Economics estimates McDonald s contribution to European Union (EU) GDP was 9.5 billion in 21 alone. Their report also shows McDonald s combines being a global brand with acting locally offering employment and development opportunities to local people, sourcing food and raw materials from European suppliers and providing business opportunities to local franchisees. This brochure provides a snapshot of the findings from London Economics work, but for further reading and in-depth analysis, please do access the full report on Did you know that... McDonald s created 6, new jobs between 27 and 21 Half a million European beef farmers supply McDonald s We source more than 97% of our food from Europe? McDonald s and its franchisees employ, people in Europe 1 in McDonald s franchisees in Europe started their careers as a restaurant employee

3 2 Supply Chain Meeting the challenge of supplying 7, restaurants We source the vast majority of our agricultural raw material from Europe. The company s purchases in core product categories such as beef, chicken and potatoes alone amount to over 2 billion a year, making it one of the largest buyers in Europe. This makes us a significant source of revenue for our European suppliers. Supply Chain McDonald s has developed standards for its supply chain in terms of food quality and safety and environmental sustainability. The impact of these standards reaches beyond McDonald s own suppliers and customers. Since many McDonald s suppliers also supply other companies (other restaurants, retailers), the quality standards imposed by McDonald s can lead to higher quality products for consumers who are not McDonald s consumers. Take beef for example: Although McDonald s only uses whole cuts of beef from the flank and forequater for its beef patties, the entire animal is reared according to McDonald s standards. In 28, nearly 385, tonnes of European beef were produced according to McDonald s standards, of which 185, tonnes were sold through non-mcdonald s channels. The supply chain is not owned by McDonald s. Instead, we act as a major buyer from independent suppliers, with many of which we have long-term business relationships. This supply chain structure supports a significant workforce in supplier firms and creates a stable climate that enables suppliers to develop their businesses for the future. McDonald s promotes standards and practices in its supply chain through quality, safety and environmental stewardship. McDonald s standards have a formative effect on the supply chain. We are committed to grow our business in a sustainable way to ensure supply this is no small task when you consider the scale of our operations... McDonald s accounts for 2.5% of all beef production in the European Union (EU) and sources from more than 5, European beef farmers McDonald s is a major purchaser from the European food manufacturing industry. For example, McDonald s buys 1% of the total European minced beef production Our spend on potatoes is worth 162m to farmers in Europe or equal to 1.6% of total production by volume in the EU Our purchases of fruit doubled between 27 and 21 McDonald s works with a network of fully independent direct and indirect suppliers the largest of McDonald s European suppliers have been supplying the company for 31 years on average. Long-term relationships with their customers help suppliers to plan for the future, make investments and grow their business Our business is responsible for 21, jobs at food manufacturers in Europe Keeping it local McDonald s has introduced menu choices tailored to local taste and preferences using traditional regional and national products. This has meant new opportunities for local suppliers and there are some great examples of products that are specific to certain markets. In Spain, for example, the menu includes a typical Spanish vegetable soup, as well as a Spanish style chicken wrap with Manchego cheese sauce. Traditional Nuernberger sausages are served in Germany, while France offers cheeses such as Cantal and specific types of beef such as Charolais in its sandwiches. Also, in Finland, the Rye McFeast uses typical Finnish rye bread. A real favourite has been the McItaly. Featuring Asiago and Parmigiano Reggiano cheeses, bacon from Val Venosta, Bresaola beef, and an apples from Valtellina, the McItaly has increased demand for traditional local suppliers. The imapct of the McItaly on the local economy is evaluated at around 3.5 million. Where does your food come from? EU 91.2% Europe outside EU 5.1% Rest of the world 3.8% We source over 97% of our agricultural raw materials from Europe making us a major customer of European farmers

4 3 Employees Providing opportunities for one of Europe s largest workforces Governments are under pressure from high rates of unemployment 1% of the total active populations and 2% of under-25 years-old in the European Union do not have a job. Upgrading skills and matching them with market demand to boost employability remains a huge challenge. This imbalance between demand and offer on the job market combined with rising rates of unemployment can have serious negative consequences for European growth and welfare systems. Society and government expect employers to do more to help develop and train their workforces. They look to employers to implement initiatives which can create a positive impact on social mobility. Against this backdrop, McDonald s employs around, people in Europe it is one of the continent s largest private sector employers and is providing real opportunities for its employees of our European countries have developed a suite of nationally recognised qualifications. McDonald s offering opportunities to acquire recognised qualifications increases skills portability for employees and contributes to the pool of qualified workers available to employers in the wider economy In 21 McDonald s provided 8, apprenticeships in Europe Our success creates thousands of jobs around 6, between 27 and 21, making the company one of the continent s largest private sector employers Significant proportions of restaurant employees regularly go on to become managers and consultants in operations or head offices. For example, in France, 8% of restaurant managers started their career as a restaurant employee We provide annual formal training for 82% of our workforce, compared with 7% in the hotels and restaurants sector as a whole The intensity of training provided by McDonald s ( hours annually per crew member) exceeds the sector average ( hours per year per employee) Workers under 3 years old make up three quarters of our people we are one of the biggest privatesector employers of younger workers in Europe +3 years Over half of the McDonald s workforce is female

5 Franchisees and the community Franchisees are encouraged to engage directly with the local community. Contributions to community can involve civic and charitable activities: for example franchisees may choose to support community sports teams or local scholarships. Engagement can also take the form of regular interaction with public services, fundraising for local charities or initiating projects for the local environment. Franchising Fostering an entrepreneurial spirit across Europe through franchising Franchising is the bedrock of the McDonald s business model it provides business opportunities for individuals using a tested business model. What does this mean in reality for McDonald s in Europe? Case Study Introducing Amir Afsar: From restaurant employee to franchisee Amir Afsar Operates in Dublin/Ireland Franchisee since: 22 Number of restaurants: Number of employees: Total % of McDonald s restaurants in the region are operated by franchisees We franchise to individuals, not to corporations, partnerships, or passive investors McDonald s franchisee agreements typically are granted for 2 years. Long-term agreements give franchisees stability and security as well as ongoing support from McDonald s head offices Franchisees operate as local businesses, recruiting, training and promoting local people The average number of restaurants operated per franchisee has increased: on average each franchisee operated 2.5 restaurants in 26, which rose to 3. restaurants in 21 From 27 to 29, 136 new franchisees entered the McDonald s system in Europe Just under a quarter of McDonald s franchisees in Europe started their career as restaurant employee in a McDonald s McDonald s does not sell products or equipment to its franchisees. Instead, franchisees purchase from a network of independent suppliers approved by McDonald s Amir applied for a job at McDonald s in 1982 and started his career as a part-time restaurant employee member. Since the beginning, Amir was impressed by the fact that part-time employees were given the same opportunities and training as full-time employees. At every stage of my career with McDonald s, at every level and with every promotion, the company kept on investing in my professional and personal development through training. Amir worked his way up to restaurant manager and in this position helped open 27 restaurants in Ireland. Throughout his time as a restaurant employee, Amir had the desire to own his own business. Not only had the company provided me with a great career but I was also aware that it gave successful employees the opportunity to own their own business through a McDonald s franchise. Amir is now the owner of restaurants in the Dublin region.

6 Netherlands Germany Czech Rep Denmark Norway Sweden Poland Finland Estonia Latvia Lithuania Belarus Russia 227 1, UK 1, Belgium Luxembourg 7 Ireland Austria Switzerland France 1, Italy 16 2 Andorra Spain Portugal Slovenia Morocco 27 Slovakia 25 Croatia 18 Hungary Bosnia & Herzegovina Serbia 15 Malta 8 Macedonia 5 Greece 3 Romania Bulgaria 35 Moldova Ukraine 71 1 Georgia Azerbaijan 6 Andorra Country Total number of restaurants Percentage of company-owned restaurants 1 or more restaurants Fewer than 1 restaurants McDonald s economic footprint in Europe This brochure provides a snapshot of the findings of the report McDonald s Economic Footprint in Europe prepared by London Economics and commissioned by McDonald s Europe. For further reading and in-depth analysis, please do access the full report on

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