ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, October 9, 1996 TAG: 9610090026
SECTION: BUSINESS PAGE: B7 EDITION: METRO
DATELINE: CHICAGO
SOURCE: ASSOCIATED PRESS
McDonald's Corp. on Tuesday named a new boss for its U.S. operations in a shakeup that analysts say signals dissatisfaction over sluggish sales at the nation's biggest fast-food restaurant chain, despite the introduction of its Arch Deluxe cheeseburgers.
Jack Greenberg, the company's vice chairman and chief financial officer, becomes chairman of McDonald's domestic restaurants.
Edward H. Rensi, McDonald's USA president and chief executive - who previously headed U.S. restaurants - now reports to Greenberg.
Greenberg will "help us maximize the growth of the U.S. business by adding the broad scope of his skills to our U.S. management team,'' Michael Quinlan, the company's chairman and chief executive said in a statement.
Spokesman Chuck Ebeling denied the move signals less confidence in Rensi's stewardship.
``This simply realigns some of our key people to strengthen the U.S. team in obviously a highly competitive market place,'' he said.
But some analysts said the move indicates Quinlan is unhappy that McDonald's has seen a series of declines in domestic restaurants open.
``It's clear that they did want to put some new blood at the top of the domestic ranks,'' said Wayne Daniels at Schroder Wertheim. ``I think maybe in Quinlan's mind it's taken a little too long for McDonald's to get around to responding to the decline in sales.''
The recently introduced line of Deluxe sandwiches, which took two years to come to market, has not immediately reversed the sales trend, analysts said.
McDonald's earlier this year introduced Arch Deluxe cheeseburger, and two weeks ago added the Crispy Chicken Deluxe, Grilled Chicken Deluxe and Fish Filet Deluxe to the line.
``This doesn't mean the Deluxe line has been the dismal failure that others believe,'' said analyst Janice Meyer at Prudential Securities Research. ``I think it is basically meeting expectations, but other parts of the business have weakened more than expectations.
``The kids business has been weakened by Burger King, and their core hamburger customers have been chipped away by some of Wendy's new sandwiches,'' she said.
Rensi recently told the company's 2,700 U.S. franchisees in a memo that Arch Deluxe has done well but was ``never intended to be a silver bullet.''
But some company officials and frustrated franchisees might have been hoping it was. Sales at stores open at least a year have fallen for five consecutive quarters, while McDonald's two biggest competitors have seen strong increases.
Burger King's brief alliance with the Walt Disney Co. for movie tie-ins also drew business away, analysts say. McDonald's recently signed a long-term movie marketing deal with Disney.
LENGTH: Medium: 58 linesby CNB