Newspaper article THE JOURNAL RECORD

`Satellite' Locations, Lower Costs Bring Growth to Giant McDonald's

Newspaper article THE JOURNAL RECORD

`Satellite' Locations, Lower Costs Bring Growth to Giant McDonald's

Article excerpt

CHICAGO _ You don't have to go far nowadays for a Big Mac and fries. Try the next block, or on the train, in a plane, or at your local supermarket.

Just when you thought McDonald's couldn't get any bigger, company executives say you ain't seen nothin' yet.

New stores are popping up fast and McDonald's is moving ahead full-steam with plans to bring consumers lunch at school, burgers at home and meals just about anywhere in between.

"Our long-term strategy is we want to be wherever our customers are," said Ed Rensi, president of McDonald's USA. "That means where they're shopping and where they're going to school, that kind of thing. Whatever it takes, that's what we're going to do."

The nation's No. 1 fast-food chain serves more than 28 million customers a day and opens about one restaurant every eight hours. The Oak Brook, Ill.-based company expects to open its 10,000th U.S. restaurant in 1995.

Earnings in the first quarter rose 12 percent and sales are growing.

For its recent success McDonald's cites a decision nearly three years ago to lower prices on core foods and a move to build smaller, and thus cheaper, restaurants.

The company touts also its formation of "strategic alliances," which allow it to sell McDonald's cuisine at unusual locations, such as Wal-Mart stores, airports, ships, gas stations and supermarkets.

While focusing on its core foods, the company has been gnawing away at competitors' market share by opening so-called satellite stores, which include only basic items like hamburgers, soft drinks and breakfast selections.

"These satellites, we think, will have a significant impact, going forward, on our U.S. businesses," said Jack Greenberg, McDonald's vice chairman and chief financial officer.

"The more locations you can have closer to your customers, the more business you'll get."

The company opened 226 satellite restaurants last year and plans to increase the pace this year. …

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