HUNGARY: The chips are down for McDonald's profits
The managing director of McDonald's 73-strong restaurant chain in Hungary revealed to the press on Tuesday (26 September) that it is still losing money. Branislaw Knezevic explained that because long-term investments in the fastfood chain now totalled US$100m, overall profit was negligible, or even negative. The poor returns are set to continue as the 6% price increase does not reflect the country's inflation rate, or the dramatic rises in production costs. The US fastfood behemoth is purchasing 90% of its raw materials on the domestic market, and has planned further investments of US$20m to ensure the local availability of materials of its French fries and fish fillets.The company anticipates a turnover of HUF18bn for this year, which represents 22% growth since 1999. It may be several years yet, however, before McDonald's can expect some tasty returns.
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