McDonald’s to strengthen its chain of outlets in Malaysia’s booming fast food sector

Factors Determining McDonald’s Outlet Chain in Malaysian Market

After a strong 2021, McDonald’s Malaysia has unveiled its ambitious five-year business expansion plan worth RM1.35 billion. Under the plan, the company proposes to open 205 new outlets, which will bring its total number of outlets in Malaysia to 500 by 2026.

After an exceptional 2019, McDonald’s Malaysia’s business took a hit in 2020 as Covid-19 restrictions reduced customer visits. However, the fast food operator quickly strengthened safety and hygiene protocols across its 300 outlets to mitigate the risk of infections, and shifted its strategies to focus on key revenue drivers such as the digital platform McDelivery, Drive-Thru and McCafé. The company also leveraged the star power of Korean pop (K-pop) music group, BTS, by launching a limited-edition BTS Meal in May 2021, which proved a huge success worldwide, including included in Malaysia. Fans of the K-pop group lined up to purchase the celebrity’s signature meal, and the packaging quickly became a coveted collectible. The bet paid off and sales rebounded in 2021 to exceed the company’s 2019 results.

The partial and phased easing of the Movement Control Order in Malaysia has strengthened out-of-home dining with consumers heading to quick service restaurants (QSRs) such as McDonald’s in 2021. This is supported by consumer surveys from GlobalData 2021, where daily meal frequency and weekly consumer visits to QSRs increased significantly between Q1* and Q4**.

The outlook for QSRs in Malaysia is promising for the forecast period 2022-2026, with urban consumers willing to dine out frequently for convenience and entertainment as pandemic conditions ease. Additionally, Western multinational fast food chains, such as McDonald’s, KFC, Domino’s and Subway, dominate the QSR space in Malaysia due to consumers’ strong inclination towards Western lifestyle and diet. These restaurants focus on value for money deals, which can appeal to 51% of Malaysian consumers who say that affordable prices or frequent promotions and discounts are the most influential factors when deciding which restaurants to dine in to visit**.

With the rapid expansion of outlets, McDonald’s Malaysia will further consolidate its position in the Malaysian fast food market. As part of its Vision 2026 strategy, McDonald’s Malaysia plans to hire 50,000 Malaysians by 2026 to increase table service at its restaurants and accelerate its drive-thru and delivery services. The fast food chain’s drive-thru is a key factor boosting its appeal among Malaysian consumers, as 53% of Malaysian respondents in GlobalData’s 2021 survey believe ease of parking is the one of the most influential factors when deciding which dining restaurants to visit. *.

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* Global data Consumer Survey Q1 2021 – Malaysia, released March 2021

**GlobalData Q4 2021 Consumer Survey – Malaysia, released December 2021

“McDonald’s to expand its chain of outlets in Malaysia’s booming fast food sector” was originally created and published by Verdict Food Service, a brand owned by GlobalData.

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