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This story appeared on Reuters today:

“Poznan, Poland, Oct 2 - Fast food giant McDonald's Corp will speed up its expansion drive in Central and Eastern Europe to tap into the region's vibrant growth and increasingly affluent middle class, its No. 2 official said.

Over the last several years, McDonald's has not grown significantly in Europe's emerging economies such as Poland or Romania as it focused on improving its image in the continent's more established markets, such as France and Britain.

The group plans to invest another $1-$1.1 billion in its European restaurants next year, McDonald's President and Chief Operating Officer Ralph Alvarez told Reuters in an interview at a newly remodeled restaurant in Poznan, western Poland.”

Given we are now in fiscal 4Q08, MCD senior executives have nearly, if not completed the budget for 2009. The budgeting process at MCD is a bottom up aggregation of profit growth from around the world. Since I don’t believe MCD is going to change its long-term sales and earnings growth rates, if growth is accelerating in Europe, it must be slowing in other parts of the world. Asia – I don’t think so. The U.S. – I thinks so.

More importantly, the dollar is going to be a headwind for the first time in three years. The headwinds continue to build for MCD. I took the chart on the dollar from Farmprogress.com
  • The $ headwinds will be steady in 2009.
A view of MCD Europe