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Friday, 24 May, 2002, 09:17 GMT 10:17 UK
McDonald's pledges profit recovery
McDonald's restaurant
McDonald's says 'once a week is enough'
Shareholders in the world's largest restaurant chain McDonald's have been promised a long-awaited turnaround this year after 18 months of falling profits.

McDonald's chief executive Jack Greenberg called 2001 the "most challenging" in the fast food giant's 47-year history.

"Our brand is strong, and our business is resilient," Mr Greenberg told hundreds of investors and employees at the company's annual general meeting.

McDonald's has failed to deliver on its earnings targets for the past two years, due to poor US sales, mad cow disease in Europe and Japan, and weak economies in Latin America.

Last month, the company reported its sixth quarterly profits fall.

Under fire

But it was not all good news for shareholders, who defeated a call from PETA (People for Ethical Treatment of Animals), investor Trillium Asset Management and lobbyists, for tougher global farming standards.

Earlier in the week, McDonald's launched an anti-obesity advertising campaign in France warning too many Big Macs could damage your health.

A spokesman said the chain had consulted nutritionists, who advised that parents should not bring their children to McDonald's eateries more than once a week.

The campaign came as authorities in the Belarus capital Minsk banned the construction of more McDonald's because they consider the food unhealthy.

Meanwhile in Brazil, McDonald's faces a possible government probe over claims it is charging franchisees too much rent and stealing their customers by opening restaurants too close to them.

McDonald's denies the claims.

Happy meals?

"Europe has had a very strong start, and we sense renewed strength in our US restaurants," said Mr Greenberg, whose tenure was recently extended for three years.

McDonald's said it plans to open up to 1,400 new restaurants this year, with 350 of them in the US.

It forecast the greatest growth potential to be in markets like China, and with non-McDonald's brands like Boston Market, Donatos Pizzeria, Chipotle, a Mexican-style grill.

It is also expecting good things from its minority stake in sandwich chain Pret A Manger.

The company now operates some 30,000 restaurants in 121 countries.

However, for a real turnaround to occur, most analysts say McDonald's must boost slowing sales in the United States, which contribute about 60% to total operating profit.

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 ON THIS STORY
Bob Langert, Macdonald's
"There is an animal welfare programme that is global, consistent and evolving."
Bruce Fiedrich, PETA
"Macdonald's are doing nothing for pig and chicken slaughter in Canada."
See also:

07 May 02 | Business
05 Apr 01 | Business
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