Originally created 05/13/05

McDonald's plans to continue healthy focus

CHICAGO - The first-year CEO of McDonald's Corp. told shareholders Wednesday that the company will extend its strong two-year recovery through more healthy menu choices and a continued focus on customer service.

Speaking at the annual meeting of the world's largest fast-food chain, Jim Skinner said McDonald's also will launch a new promotional campaign touting healthy lifestyles.

"We have great momentum. Our charge is to keep it," said Skinner, the third CEO to preside over the McDonald's annual meeting in as many years.

Skinner took over in November after Charlie Bell was forced to resign because of cancer, just seven months after replacing James Cantalupo, who died in April last year from a heart attack. Bell died in January.

Despite the turnover in the executive suite, McDonald's has strung together its best stretch of same-store sales growth in nearly 25 years, announcing on Monday its 24th consecutive month of improved global sales.

Executives on Wednesday credited the performance to new menu options, later hours and better customer service, such as cashless payment options.

McDonald's rolled out a new fruit and walnut salad in U.S. restaurants last week and has introduced more salads in Europe as well as items such as chicken flatbread and fruit smoothies, President and Chief Operating Officer Mike Roberts said.

Next week it plans to introduce Paul Newman's brand lowfat Italian dressing and, later this year, premium chicken sandwiches and a stronger new coffee blend.

A new "balanced lifestyles" promotional campaign will include fruit and milk in Happy Meals, activity programs in schools and a new partnership with the International Olympic Committee, Skinner said.

Last year, McDonald's phased out its extra-large "Supersize" fries and drinks amid pressure to cater to Americans' growing preference for healthier food options.

Douglas Christopher, an analyst at Crowell Weedon and Co. and a McDonald's shareholder, said he thinks the company has found the right product mix.

"It's geared toward a core focus on health, versus just a temporary or fashionable focus on health, and I think it fits well with their core fast-food products," he said.

The Oak Brook, Ill.-based company also plans to spend $1.7 billion this year to open about 700 new restaurants worldwide - including 100 in China - and to renovate 1,300 restaurants, officials said Wednesday.

In late morning trading, McDonald's shares were 23 cents lower at $29.87 on the New York Stock Exchange. The stock has traded in a 52-week range of $25.05 to $34.56.


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