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American Morning
Minding Your Business: McDonald's, Markets
Aired January 23, 2003 - 07:47 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: McDonald's is biting the bullet, the fast food chain is expected today to announce the closing of more restaurants.
And that and a market preview with Andy Serwer.
How are you? Hungry?
ANDY SERWER, "FORTUNE" MAGAZINE: Fine, how are you doing? Yes, I'm hungry here for some news out of McDonald's. Let's check in with the markets.
Yesterday, take a look, the Dow and all the other indexes down again. Five days in a row. Most indexes now down for the year, Paula. So much for that little rally. We talked...
ZAHN: Yes, well that was your rally.
SERWER: That was my rally.
ZAHN: Your 50-point increase you called a rally.
SERWER: Fourteen trading days, that was the January effect and now we're back down again. War drums hurting stocks. Also earnings just lousy as Bill Walton might say. The bears are back and just a difficult situation.
One story that we're going to be watching today, McDonald's. As you mentioned, they're going to be coming out with earnings and they're going to post their first loss ever -- their first quarterly loss. McDonald's is important not only because it's the biggest restaurant chain in the world, but also its problems are symptomatic of other troubles companies are facing. Flagging sales, slow growth and they've already closed 300 stores and they're probably going to be closing 200 more and they're cutting more jobs.
What's wrong with McDonald's, Paula? Well,...
ZAHN: Well I want to know that, why the flagging sales? Is this a function of the economy or competition?
SERWER: It's competition. The sales is a problem, but competition because people are still buying burgers, they've got so many choices though, Wendy's, Burger King, the business is over saturated. For years McDonald's said it would not happen. It has happened. There are too many burger joints in America. Meanwhile, price wars. They've got the Dollar Menu. Great for us, bad for them. European beef hangover, people are concerned about mad cow. Still a little bit on the margins, especially overseas.
ZAHN: Is this in fact hitting Burger King and Wendy's, too?
SERWER: It is. It absolutely is.
ZAHN: So everybody's sales are a little bit off?
SERWER: Yes.
ZAHN: You wouldn't know that by looking at our waistlines would you -- Andy?
SERWER: Right. Well you know you can order a couple of Quarter Pounders and through out the buns and you're doing OK, according to Atkins.
Fat, the new tobacco. This is a big problem. We talked about this a lot yesterday. This is the cover of "Fortune" magazine, our magazine. Here you can see "Is Fat the Next Tobacco?" Well, the trial lawyers are out there trying to pound the drums on this one. Yesterday, though, Jack Cafferty reported that there was a failure in terms of someone trying to sue McDonald's. Here's the "Daily News." Remember that teenager who tried to sue them, that case was thrown out of court, but...
ZAHN: But what you're saying...
SERWER: ... the litigation is not over, that's what I'm saying.
ZAHN: Yes, and what you're saying in this piece is if lawyers are going to compile all this information about hidden bad stuff in this food we're eating that...
SERWER: That's right.
ZAHN: ... maybe if we knew existed we probably wouldn't eat the stuff. Is that the...
SERWER: Right. If you changed the serving size we can show that, you know all that kind of stuff.
ZAHN: Well why don't you come back and tell us more about that later on this morning.
SERWER: It's an interesting story.
ZAHN: Andy Serwer, thanks.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired January 23, 2003 - 07:47 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: McDonald's is biting the bullet, the fast food chain is expected today to announce the closing of more restaurants.
And that and a market preview with Andy Serwer.
How are you? Hungry?
ANDY SERWER, "FORTUNE" MAGAZINE: Fine, how are you doing? Yes, I'm hungry here for some news out of McDonald's. Let's check in with the markets.
Yesterday, take a look, the Dow and all the other indexes down again. Five days in a row. Most indexes now down for the year, Paula. So much for that little rally. We talked...
ZAHN: Yes, well that was your rally.
SERWER: That was my rally.
ZAHN: Your 50-point increase you called a rally.
SERWER: Fourteen trading days, that was the January effect and now we're back down again. War drums hurting stocks. Also earnings just lousy as Bill Walton might say. The bears are back and just a difficult situation.
One story that we're going to be watching today, McDonald's. As you mentioned, they're going to be coming out with earnings and they're going to post their first loss ever -- their first quarterly loss. McDonald's is important not only because it's the biggest restaurant chain in the world, but also its problems are symptomatic of other troubles companies are facing. Flagging sales, slow growth and they've already closed 300 stores and they're probably going to be closing 200 more and they're cutting more jobs.
What's wrong with McDonald's, Paula? Well,...
ZAHN: Well I want to know that, why the flagging sales? Is this a function of the economy or competition?
SERWER: It's competition. The sales is a problem, but competition because people are still buying burgers, they've got so many choices though, Wendy's, Burger King, the business is over saturated. For years McDonald's said it would not happen. It has happened. There are too many burger joints in America. Meanwhile, price wars. They've got the Dollar Menu. Great for us, bad for them. European beef hangover, people are concerned about mad cow. Still a little bit on the margins, especially overseas.
ZAHN: Is this in fact hitting Burger King and Wendy's, too?
SERWER: It is. It absolutely is.
ZAHN: So everybody's sales are a little bit off?
SERWER: Yes.
ZAHN: You wouldn't know that by looking at our waistlines would you -- Andy?
SERWER: Right. Well you know you can order a couple of Quarter Pounders and through out the buns and you're doing OK, according to Atkins.
Fat, the new tobacco. This is a big problem. We talked about this a lot yesterday. This is the cover of "Fortune" magazine, our magazine. Here you can see "Is Fat the Next Tobacco?" Well, the trial lawyers are out there trying to pound the drums on this one. Yesterday, though, Jack Cafferty reported that there was a failure in terms of someone trying to sue McDonald's. Here's the "Daily News." Remember that teenager who tried to sue them, that case was thrown out of court, but...
ZAHN: But what you're saying...
SERWER: ... the litigation is not over, that's what I'm saying.
ZAHN: Yes, and what you're saying in this piece is if lawyers are going to compile all this information about hidden bad stuff in this food we're eating that...
SERWER: That's right.
ZAHN: ... maybe if we knew existed we probably wouldn't eat the stuff. Is that the...
SERWER: Right. If you changed the serving size we can show that, you know all that kind of stuff.
ZAHN: Well why don't you come back and tell us more about that later on this morning.
SERWER: It's an interesting story.
ZAHN: Andy Serwer, thanks.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
