updated 12/15/2010 12:47:05 AM ET 2010-12-15T05:47:05

By Fang Yan and Terril Jones

BEIJING (Reuters) - McDonald's Corp plans to double the number of its restaurants in China to 2,000 by 2013, a senior executive said on Wednesday as it speeds up expansion in the fastest growing major economy.

The top global fast food chain, which opened its first outlet in the southern boom town of Shenzhen 20 years ago, is facing fierce competition with Yum Brands Inc , the parent of Pizza Hut and KFC, which has roughly 3,700 outlets in China.

But it has been intensifying its input, opening 165 new restaurants in the country this year, with a plan to add up to 200 outlets in 2011.

"China has been the fastest-growing market for McDonald's worldwide with regard to new restaurant opening," its China chief executive, Kenneth Chan, told reporters in Beijing.

"It took us almost 19 years to reach 1,000 restaurants. We will get our next 1,000 restaurants within three years.

To help attract more customers, the U.S. fast food giant has also began to update the image of its outlets, featuring bright, warm colors along with soft, comfortable seating and simple but fashionable interiors.

Four restaurants in downtown Beijing have gotten a face-lift already, and 80 percent of its outlets across China will be upgraded by 2013, Chan said.

In addition, half of all new McDonald's restaurants to be opened in the next three years in China will feature Drive-Thrus to appeal to China's increasingly mobile population, he added.

McDonald's had in mid-November raised menu prices by 0.5 to 1 yuan, or 8 to 15 cents, in mainland China to offset higher food costs.

Chan declined to say whether there would be further price hikes given China's rising annual consumer inflation, which hit a 28-month high of 5.1 percent in November.

But he said McDonald's has been offering value meals, such as a 6-yuan breakfast and a 15-yuan lunch, and will continue to do so in the future.

(Editing by Ken Wills)

Copyright 2012 Thomson Reuters. Click for restrictions.


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