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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Mark Marcellus who wrote (15681)	10/23/2002 2:17:21 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 78741

Mark: Haven't listened to CC yet, but read some analyst reports: LEH negative, thinks street is too high. JP Morgan is so so: Likes operational improvements but sees some challenges, Merrill is, as always on MCD, positive looking for return to premium multiples as visibility increases. 137k mystery shopper and other measures to improve quality were mentioned...but no measurable increase in sales have resulted. Burger Kings .99 menu isn't negatively impacting nearby stores. Merrill favorably mentions some new salads coming. That and other premium sandwich offerings will probably help offset margin erosion form $1 menu. No mention of my central quandry: Is speed of service a real & pervasive problem? The survey's I posted here indicate, IMO, it's really not...except for WEN which has improved dramatically, they're in line. But anecdotal experience and comments indicate it's a big problem. The article linked below discusses the shift to 'made fresh' from anticipating demand, which would imply a substantial slowdown. Greenberg is a former Arthur Andersen accountant, not a restaurant guy....which is ok IF he can hire really good restaurant guys to run operations in the MCD tradition. I don't see this to be the case, unfortunately. This looks like a 'treading water' story until Europe and Japan forget 'Mad cow' and Latin America revives, IMO. The quality moves won't drive growth...they'll just prevent further decline. Pinning a revival on fat price cuts, the new $1 menu, isn't the answer...competitors will just match it...as they have. CEO Full Count: McDonald's Jack M.Greenberg forbes.com