Recession: McDonald's Is Lovin' It

As the recession takes its toll on nearly every sector of the economy, McDonald's is continuing to clean up. Forbes reported Friday that the chain plans to spend $1.1 billion in Europe this year—half of its total capital allocation—on new restaurants and upgrades.

In many of the countries where McDonald's plans to open 240 new restaurants, including Spain, Italy, France, and several Eastern European countries, the global slowdown is hitting especially hard. But Denis Hennequin, the company's Europe chief, sounds almost haughty about McDonald's prospects. "There is no country from our perspective that isn't growing," he told Forbes.

From everybody else's perspective, there is no country that isn't shrinking. But that's nothing but good news for McDonald's, as people in most of its markets increasingly opt for cheap fast food instead of sit-down restaurant meals. And with grocery prices slow to come down from their highs of last summer, fast-food meals often compare well, pricewise, with eating at home.

For the time being, anyway, this is not a matter of McDonald's "doing OK, considering." It's clearly a matter of McDonald's directly benefitting from the recession. The company on Monday will report its fourth-quarter results, and it's widely believed they will be very good. McDonald's previously reported global same-store sales growth of 8.2 percent in October and 7.7 percent in November.  

Costs are still high, but by raising prices on a few items, the company has largely managed to maintain margins without dinging sales.