The fast food giant said the fall in operating profit, which came despite a £238m increase in company turnover, was predominately driven by an investment and intangibles impairment of £48m.
This was further exacerbated by inflationary pressures, impacting food, paper and utility costs within its company-operated estate.
McDonald’s Restaurants Limited reported a total company turnover of £1.8bn for the year ended 31 December 2023, with a gross profit of £826m, down from £861m the year before.
The rise in turnover was attributed to increased sales across McDonald’s system.
Profit after tax fell from £129.7m to £35.5m over the period.
McDonald’s described the level of business and the period end financial position as ‘satisfactory’, in spite of ongoing challenges presented by the inflationary environment, both for the company and the wider McDonald’s eco-system.
It noted that its high street estate continued to be impacted by declining retail footfall, but that it had mitigated that risk through investment in the customer experiences across its restaurants, including its high street and drive-thru stores and delivery platform.
Total sales in 2024 are, so far, ahead of 2023.
Back in August, McDonald’s, which is marking its 50th anniversary in the UK this year, announced plans to open a further 200 new restaurants in the next four years.
The expansion, revealed as part of the new report called McDonald’s at 50, reflects a £1bn investment from McDonald’s and its franchisees in the UK and Ireland.
The roll out will include testing new restaurant formats including new ‘drive to’ sites, and a renewed focus on opening high street locations.
Around 89% of McDonald’s 1,500+ UK restaurants are now run by franchisees with the group saying it hopes to see that number grow in the future.
