McDonald's Corp. beefs up Canadian expansion plans

American fast-food giant McDonald's Corp. has stepped up its expansion in Canada again after holding back for more than five years - and the fast-food chain's Canadian chief sees the potential for a much-larger footprint across the country.

"This year, we're going to build more restaurants than we've built in the last seven or eight years," McDonald's Canada president John Betts told Reuters on Thursday. "Next year, it's going to ramp up from that."

Around 30 new stores will open by the end of 2012, Betts said, but he did not give specific figures for future periods. McDonald's has about 1,400 outlets in Canada - and is introducing take-home bags of coffee.

His upbeat message stands out against last week's earnings release, when McDonald's reported its worst quarterly restaurant sales growth in nine years thanks to tough competition in the United States. Betts said the chain built too many stores too quickly in Canada. But it turned its business around in the last three years, thanks in part to a big push into the takeout coffee market, which helped boost breakfast sales.

Coffee is not an obvious point of entry in Canada, where Starbucks Corp. is ubiquitous and doughnut and coffee chain Tim Hortons Inc. borders on a national symbol. But between McDonald's coffee push and Tim Hortons' expanding lunch menu, the two chains are increasingly going head to head.

And, in an interview with the Montreal Gazette, Bets confirmed that after making itself a coffee destination, McDonald's is now turning its sights on the home market.

On Nov. 5, the chain will begin selling 340-gram take-home bags of ground coffee bearing the McCafé brand at its restaurants in Canada.

The price is $6.99, the same as Tim Horton's charges for similarly-sized tins. Betts said it's a natural progression for the chain, since it now has "coffee cachet" with customers and most coffee still is consumed in the home.

"It's a great opportunity to extend the brand. People like the coffee. It's the reason we're headed for a fifth-year of double-digit breakfast growth. You cannot talk about coffee today in Canada without talking about McDonald's," Betts said.