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09/11/02 . By Simon English in New York . Daily Telegraph . UK
McDonald's to shut in 10 nations
The global dominance of McDonald's took a knock yesterday when the fast food giant issued a profits warning and announced plans to shut restaurants in 10 countries.
It will close 175 unprofitable restaurants and axe 400-600 jobs, quitting three unnamed Middle Eastern and Latin American countries altogether.
McDonald's is struggling to increase its business as consumers opt for healthier food. In September, the company halved the amount of "bad" fat in its French fries in an attempt to address concerns that the food is fattening.
A crowded restaurant market and complaints about poor service have hurt profits and the share price. The latest shake-up will lower fourth quarter income by between $350m and $425m, forcing it to miss earnings forecasts.
This admission sent the shares down a further $1.81 to $17.50 by midday. Chairman Jack Greenberg said: "These actions are the right things to do for McDonald's shareholders, the brand and our business."
Mr Greenberg has been in charge for four years and is beginning to face questions from Wall Street about his strategy.
McDonald's has 30,000 restaurants around the
world, of which more than 13,000 are in the US. It
has more than 40pc of the hamburger market.