As global brands pull back, McDonald's expands in China

• McDonald's China same-store sales grew 3.4% in Q1 2026, with half of the company's global new store openings last year occurring in mainland China
• The chain competes on value with its 'one-plus-one' combo priced as low as 14 yuan ($2.06), appealing to budget-conscious consumers while maintaining perceived quality advantages over local rivals
• Nostalgia drives traffic as McDonald's reintroduced classic strawberry and vanilla milkshakes (discontinued in 2014) at 44 stores, creating viral buzz among consumers who recall the brand's 1990 China debut

Summary: McDonald's Expands Aggressively in China While Global Brands Retreat

Key Developments:

McDonald's is significantly expanding its Chinese footprint while competitors like Starbucks, Nike, and LVMH struggle in the market. The company plans to reach 10,000 stores in mainland China by end of 2028, up from over 7,700 at end of 2025. China now represents the company's second-largest market after the United States.

Growth Metrics:

• 50% of McDonald's new global stores opened in mainland China last year
• Same-store sales in international developmental licensed markets (including China) rose 3.4% in Q1
• The China business is 52% owned by Chinese investor Trustar, a Citic Capital private equity unit

Success Factors:

McDonald's is winning through a dual strategy of nostalgia and value. The brand benefits from its 1990 entry into China, symbolizing the country's opening and modernization. Recent reintroduction of classic strawberry and vanilla milkshakes (discontinued in 2014) went viral, now available at 44 stores across 15 cities.

The company's competitive pricing strategy includes "one-plus-one" combos starting at 14 yuan ($2.06), positioning it as affordable quality against local competitors like Tastien. The menu balances classic items (Big Mac) with localized offerings (honey barbecue chicken, dragon fruit McFlurry).

Market Context:

While foreign brands typically struggle against rising Chinese nationalism and improved local competitors, McDonald's maintains its reputation for international quality standards while competing effectively on price. According to China Skinny consultancy, consumers perceive McDonald's as delivering superior value rather than just low prices, considering taste, quality, and experience.