McDonald's profits boosted by store revamps

McDonald's store, New Delhi McDonald's is spending $1.45bn this year revamping its stores

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McDonald's profits rose 5% in the first quarter to $1.27bn, helped by a revamp of its restaurants.

The company said profits had also been boosted by new menu items, including chicken McBites and McCafe drinks.

Sales at US stores that have been open at least 13 months rose 8.9% in the quarter.

Last month McDonald's said Don Thompson would takeover as chief executive in July. He replaces Jim Skinner who retired after 41 years at the firm.

There was concern that the downturn in Europe would hurt sales there, but the quarterly results showed solid sales growth of 5%.

"People have been most concerned about Europe and it looks like it's OK," said Sara Senatore, an analyst with Sanford C Bernstein.

The company is spending $1.45bn this year on giving 2,400 stores a makeover. Analysts say that has helped attract extra customers.

Jill McDonald, the chief executive of McDonald's UK business said: "We have been consistently investing in our business to offer customers quality food at affordable prices. We have re-imaged over 90% of our UK restaurants to make them more attractive destinations."

The company also plans to open 1,300 new stores this year.

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