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McDonald’s hoping new burger a Whopper stopper

July 1, 1997

CHICAGO (AP) _ McDonald’s Corp. hopes it has come up with a new Whopper stopper.

Since December, the fast-food giant has been testing in selected markets in southern California a new sandwich called the Quarter Pounder Big & Tasty, which includes lettuce, tomato and mayonnaise, and sells for 99 cents. It will be rolled out statewide this summer, according to Advertising Age magazine.

While the burger, if it is eventually sold nationwide, could prove a formidable challenge to Burger King’s hot-selling Whopper sandwich, analysts said Monday it is just one piece in a formula the world’s largest fast-food chain must come up with to boost sales.

``McDonald’s needs a consistent supply or flow of new products, and the Big & Tasty is not a bad burger,″ said Morgan Stanley analyst Howard Penney. ``But the biggest issue for McDonald’s, the biggest way they can improve perceptions about taste, is to improve the style of servicing its food.″

While McDonald’s remains the undisputed leader in the fast-food industry, its sales at U.S. stores open at least a year, an industry measure of performance, have in recent quarters been sluggish or lower. The first quarter was a exception as sales were boosted by lower-price Chicken McNuggets.

Burger King, meanwhile, has been making inroads with strong marketing campaigns and its 99-cent Whopper sandwich. Wendy’s also has seen sales grow strongly; analysts say its recent introduction of pita sandwiches will prove particularly profitable this year.

McDonald’s executives for months have been stressing that they are examining all approaches to boosting U.S. same-store sales. That includes emphasizing quality food, fast and friendly service, convenience and value, the hallmarks of its success in the past.

The chain, based in the Chicago suburb of Oak Brook, also is looking at ways to get its message across effectively to the consumer. McDonald’s recently notified lead advertising company Leo Burnett Co. that it must compete with DDB Needham Chicago for its huge account, estimated at $300 million annually.

Burnett, which currently handles the bulk of McDonald’s image advertising and created the current ``My McDonald’s″ campaign, has been crafting the client’s national campaigns since 1981.

Needham, which created McDonald’s ``You deserve a break today″ campaign of the ’70s, promotes the client’s breakfast products and handles most promotions.

The move comes after several corporate setbacks for McDonald’s. It quickly yanked most of its Campaign 55 discount pricing promotion after it failed to catch on with consumers and got only lukewarm support from some franchisees.

Its relatively pricey Arch Deluxe line of burgers and chicken sandwiches, which cost in the hundreds of millions of dollars to develop, also has been selling poorly, according to analysts and some franchisees. McDonald’s has said the sandwich is meeting its expectations.

A company initiative also is under way that would bring new food preparation technology to most restaurants and the return of toasted buns, franchisees say.

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