We're not loving it: McDonald's forced to close restaurants

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The Independent Online

Falling sales have forced McDonald's to close 25 restaurants, in a sign that the public may be losing its hunger for the company's colourful plastic interiors and fatty burgers.

Amid concerns over rising obesity and stiff competition, the US multinational revealed that shutting the outlets would knock £22m off global profits.

The closures, months after the group celebrated its 50th birthday, are accompanied by plans to sell 50 restaurants owned by the group to franchisees.

McDonald's has enjoyed great success in the UK since it opened its first restaurant in Woolwich in 1974, and now operates 1,200 restaurants - one on almost every high street.

But the world's biggest fast-food company has been under pressure over the unhealthiness of its food, which was the subject of the film Super Size Me, in which the documentary maker Morgan Spurlock wrecked his body by eating McDonald's for a month.

In its latest annual report, filed with the US Securities and Exchange Commission on Monday afternoon, McDonald's announced that sales at its British restaurants that were open for more than a year fell in 2005. Profit margins at McDonald's European company-owned restaurants fell by almost 1 percentage point to 14.9 per cent last year.

McDonald's blamed stiff competition in the fast-food market and weak consumer confidence for the difficulties. Its new European chief, Denis Hennequin, admitted that new coffee and sandwich chains have hit sales.

McDonald's owns and operates about 8,000 of its 31,000 restaurants worldwide, while the rest are operated by franchisees - independent entrepreneurs who pay royalties to the company. Britain is a key market because with France and Germany it is a large part of McDonald's European operation, which accounts for more than a third of global sales.

During the 1990s, McDonald's generated unwelcome publicity by taking legal action against two protesters who were handing out anti-McDonald's leaflets. Helen Steel and Dave Morris, dubbed the McLibel 2, had some of their claims about McDonald's practices upheld by the courts at the conclusion of a 314-day trial in 1994.

Rise and fall

1974 The first UK McDonald's opens in Woolwich, south-east London - the company's 3000th restaurant

1990 McDonald's files a libel suite against activists who distributed a pamphlet, "What's wrong with McDonald's?" The longest libel action in English history was settled in their favour after seven years, but only at a cost of £10m

2003 The British arm of McDonald's suffers its biggest profit collapse, from £83.8m to £23.6m pre-tax

2004 Release of Morgan Spurlock's documentary Super Size Me - in which eating nothing but McDonald's for a month brought him 25lb weight gain, liver degradation, reduced sex drive and depression

Oliver Duff