McDonalds has announced it will be closing more than 700 outlets in South Australia, including its flagship outlet in Sydney.
The company says the closures will help it reduce its workforce and boost profitability, which it expects to return to Australia over the next 12 months.
The decision to close stores in Adelaide comes as the company prepares to announce a move to South Australian capital city Perth.
In a statement, the company said it would close its South Australian stores by the end of 2017 and the Adelaide store would be closed in 2019.
“The timing of these announcements is not in any way surprising, given the ongoing global economic crisis and global economic downturn,” the statement said.
“We believe the timing of this announcement is not only in the best interests of our business, but also in the interest of our shareholders.”
McDonalds, the world’s biggest restaurant chain, is Australia’s third largest restaurant group, after Burger King and KFC.
The move to the new regional capital of Perth will come as McDonalds struggles to keep up with the rapid growth in Australia’s fast-food market.
It said it was not yet clear how many of its stores will be closed.
“There are a number of factors that are affecting our business including the global economic outlook, the strength of our consumer base, and the economic impact of the global financial crisis, which we have been trying to manage,” McDonalds SA chief executive David Thodey said.
McDonalds Australia managing director Rob Hales said the company was considering a range of options including opening new stores in Perth, Melbourne and Adelaide.
“Our stores are built to support our team, our customers and our community,” he said.
Mr Hales also said the changes were “not a surprise” to customers.
“It’s an ongoing process and we will continue to review our stores and the processes we have in place,” he told the ABC.
The supermarket chain’s statement also said it planned to build more than $30 billion in new infrastructure over the coming years.
“Today we have a stronger foundation, more efficient, more productive and stronger team, and we continue to look forward to building a more prosperous and successful company in the future,” Mr Hames said.
The news comes after the company revealed a major restructuring plan last year, with plans to cut more than 4,000 roles.
McDonald’s has been in decline in recent years.
Its shares fell more than 12 per cent in 2014, while its profits have slumped by about half.
McDonald has previously said it had about 30,000 permanent employees, but the company says it is working to fill more than 35,000 positions in the coming months.
McDonald is in the midst of a major overhaul to its corporate structure, which will see it move to a more streamlined structure.
The shift will see McDonalds focus on its brand, including rebranding to the more modern Macaroni Grill brand and investing heavily in marketing.
The chain also plans to build new restaurants in other states.