Mcdonald's New Look Boosts European Sales

WOLFRATSHAUSEN, GERMANY (Wednesday, June 27, 2007) - In this German hamlet 15 miles south of Munich, McDonald's Corp. (MCD.N: Quote, Profile, Research) is conducting an experiment that counters the fast-food, drive-through image of the world's biggest restaurant company.

The McDonald's restaurant here has a fireplace, leather sofas, wooden floors, vases with plastic flowers and a McCafe, where it serves pastry, tiramisu and cappuccino on china.

The eatery is what the company calls one of its best examples of weaving together ambience, convenience and food. The experiment is part of McDonald's Europe's strategy to create a more restaurant-like, sit-down eating experience.

Sales at the two-story restaurant, where the makeover was finished 18 months ago under a design called Venge, have grown 22 percent.

Michael Heinritzi, who owns and operates 30 McDonald's franchises in southern Germany including this one, says his customers enjoy the restaurant more and that clients now include businessmen who drop by in the morning for a coffee.

Before the remake, mothers would drop off children for a birthday party and pick them up later. Now they stay and enjoy a latte and a piece of cake, he said.

McDonald's has remade 2,000 of its 6,400 eateries across Europe, which is the parent's second-biggest market outside North America. Six hundred more such makeovers are planned a year under 10 designs with names such as Urban, Qualite and Less Is More.

"Reimaging," said Denis Hennequin, president of McDonald's Europe, "is important in the fast-moving, competitive world of retail."

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