The rebranding effort that brought salad on to the menu and revived its fortunes elsewhere in the world has not halted falling sales in Britain. In a statement to the US Securities and Exchange Commission on Monday, McDonald’s said that the closures would cost about £23 million, and blamed stiff competition in the fast-food market for dragging down its performance in Europe. Managers have blamed chains such as Pret A Manger and Starbucks for luring customers away.

Denis Hennequin, the European head of McDonald’s, has said that his company’s restaurants look “tired” in comparison with the sofas and chrome-finished interiors of their high street competitors.

But it is fighting back and plans to redesign hundreds of its 1,250 restaurants in Britain. A spokeswoman said that some would have sofas, some would be wi-fi hotspots for internet users and all would be given a look to match their location.

The closures come as McDonald’s is already selling 50 of its outlets to franchises. It is the largest retraction of its British operations since the Golden Arches made their first appearance in Woolwich in 1974.

In those days its brightly coloured outlets, plastic furniture and curious wall hangings were considered an upmarket dining option in comparison with its closest competitor, Wimpy.

“We have been in the UK for over 30 years,” the spokeswoman said. “During that time places and habits have changed. We have to make sure that we are still relevant.”

And there are other troubling signs for McDonald’s. A recent survey by Coutts UK showed that it had fallen in the estimation of children aged 13 to 15. Last year 8 per cent of teenagers questioned ranked a McDonald’s as their favourite food. This year only 1 per cent did so.

Nor may the company rely on advertising to court younger customers. At the end of this month Ofcom, the communications regulator, will publish the results of a consultation on food advertising aimed at children. It could recommend restrictions on fast-food advertising.

Meanwhile, at Starbucks, Cliff Burrows, the UK managing director, said that the coffee-shop chain would continue to expand.

“I suppose we are a competitor of McDonald’s in the sense that we are a place where people come and have a refreshment when they are out shopping,” he said.

Starbucks has opened 50 outlets in the past 12 months and Mr Burrows said: “We are still looking to acquire sites.”

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