Posted on: Saturday, December 4, 2004
McDonald's new chief to stay on track
By Delroy Alexander
Chicago Tribune
CHICAGO — The third hand to take the helm of McDonald's Corp. this year said he will maintain course on aggressive marketing, new product development and restaurant improvement plans that have re-invigorated the burger giant's sales and stock in the past two years.
"Change in leadership does not mean change in strategy," Chief Executive James Skinner said yesterday during his first conference call with the media since he was named to the top job Nov. 22. "We know, and our sales results prove it, that when we focus on our customers and our restaurants ... McDonald's can't be beat."
Formerly vice chairman of the Oak Brook, Ill.-based company, Skinner became McDonald's third chief executive this year when 44-year-old Australian Charles Bell abruptly stepped down to focus on his battle with colorectal cancer. Bell ascended to the job in April, following the fatal heart attack suffered by former Chief Executive Officer James Cantalupo at a McDonald's franchisee convention in Orlando, Fla.
Skinner and Michael Roberts, promoted two weeks ago from chief executive officer of McDonald's USA to chief operating officer, used during the call many of the buzzwords that characterized the brief regimes of Bell and other predecessors.
"Being better means attracting even more customers, more often, who are more brand-loyal, and doing it more profitably," said Skinner. "This is our formula for sustained, profitable growth."
Toward that end, the pair said McDonald's plans to boost marketing and promotions. McDonald's is planning to offer a premium chicken sandwich to replace its existing white-meat offerings. Other items for next year include fruit and walnut salads and, possibly, Oven Selects, toasted delicatessen-style sandwiches that have been introduced in Canada and Australia and are being test-marketed in five states.
Additional initiatives for next year include extending hours at more restaurants, and the possible introduction nationwide of gift cards.
Skinner and Roberts characterized the mood at McDonald's as confident, pointing to increased traffic at U.S. restaurants as well as bigger average check sizes, up by 40 percent to 70 percent.
McDonald's serves 47 million customers a day in more than 30,000 restaurants, about 13,600 in the United States.
In each of the past 18 months, McDonald's has posted strong sales gains in the United States, which accounts for 70 percent of operating income.
Skinner, 60, said he was in fine health, works out and recently had passed his own physical with no problems.
Meanwhile, McDonald's has set aside more than $300,000 to help its ailing former CEO Bell return to his native Australia, according to documents filed with the Securities and Exchange Commission yesterday.
McDonald's arranged for Bell — who resigned two weeks ago weakened from his battle with colorectal cancer — to fly home in a "specialized medically outfitted aircraft," according the filing.
"The estimated aggregate expense associated with this arrangement is approximately $300,000," McDonald's said in the document.
In addition to the plane, McDonald's agreed to buy Bell's U.S. home, to ship his belongings to Australia and to cover any tax liability as a result of the arrangement, the filing said.
Skinner did not discuss Bell's condition. He said only that Bell had returned to Australia to be with friends and family.
Bell, diagnosed with cancer just weeks after taking the top job in April, underwent two surgeries — one in May and another in August.
