McDonald's consumer search for small cities

Each time a new McDonald's restaurant opens in Brazil, a bell rings in the Dorival Oliveira, Vice President of network development in the country. And from here to the end of the year, he's hoping the Bell often badale. Oliveira, who is breaking small towns, of 20 thousand inhabitants, will try to open 41 restaurants in little more than three months. Until last week, 28 had been opened. The challenge is to come up with something around 69-number registered last year – and keep this track in 2014.
Among the seven cities that have already received this year, the first unit of the McDonald's are Alexânia (GO), with 25 000 inhabitants, and Cajamar, with 64 thousand. "The myth that only open restaurants in Valley cities of 200 thousand inhabitants was overthrown," says Oliveira, Brazil responsible for physical expansion of the network, the largest fast-food in the world and administered in Latin America by Arcos Dorados.
In fact, a recent study by the Boston Consulting Group consulting firm, shows that companies that want to reach 75% of the households of classes A, B and C until 2020, will need to put their feet 405 cities. Today, this same volume of consumers are in 345 municipalities.
Classes A and B are the audience that sustains sales at McDonald 's, says Roberto Gynepec, Vice President of marketing for company in Brazil. "But we have to be prepared to meet the C and she needs to be Demystified: is no longer poor and is more polite." The Angus sandwich, released in mid-2012 and priced 20% higher than the rent-heads of the network-the BigMac, Cheddar, Chicken and Block-serves as an example to explain this "new" market.
Gynepec proposed put Dijon mustard in Angus, arguing that the public A/B is in search of new and different flavors. Some colleagues argued that a lot of people wouldn't know that it is French mustard. Still, the product was on the street. "In three months, doubled sales of Angus". And it's not just the client more beneficiary who wants to try; class C, too, although less frequently, says Gynepec.
The McDonald's flag is today in about 180 municipalities. "The potential to be explored is huge," says Oliveira, who has gotten his hands on a plan that maps the 5,561 Brazilian municipalities. The network is with 759 stores in Brazil, being 366 inside shopping malls and 393 out of them.
In addition to the easy task of seeking land that accommodate restaurants with an area of approximately 2 thousand square meters, Oliveira is concerned with increasing the efficiency of the network. Is talking to the builders who raise the restaurants-in General, are contracted local companies-so that the waste of material decreases. "The bricklayer, when playing the mass on the wall, to give the finish, need to drop down a minimum of material," he says.
Oliveira has his eye until the size of the Windows and in the extension of glasses of restaurants: more daylight means reduced electric bill; and less vertical bars separating the glass from the Windows, allows to make cleaning faster.
A more efficient operation can help, of course, to improve financial performance. This year, it is particularly important for Arcos Dorados in Brazil. The company is changing the model of hiring employees in stores and the cost of the payroll should rise. Fulfilling court decision of March the Ministry of labor of Recife (PE), the mobile journey of workers is being replaced by eight days and six hours. The network employs in Brazil about 41,118 people, mostly in restaurants.
In the first six months of this year, Arcos Dorados registered in Brazil 5.8% increase in net revenues and 10.5% indentation in the operating profit. In the second quarter alone, revenues rose 9.4 percent to $ 459 million, and operating profit increased 8.3% to $ 36.9 million. Sales, in reais, grew 15.6 percent from April to June.