NEW YORK (CNN/Money) -
You want McStuff with that?
McDonald's Corp. is thinking about expanding beyond food into retailing as the world's largest restaurant chain looks for ways to bolster sluggish sales in the saturated U.S. fast-food market.
But the question is, what to sell?
McDonald's spokesman Walt Riker told CNN/Money the company is considering several ideas on what it could sell in its 30,000 stores worldwide, but declined to provide any hints.
"We're going to do some testing. It's the prudent thing for the company to do. We're looking at every possible innovation and concept," Riker said. "It's more in the speculative mode right now. It would be unfair to jump to conclusions."
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McDonald's may sell non-food items. (Source: McDonalds.com) |
Analysts who follow the Oak Brook, Ill.-based company speculate that McDonald's could hawk anything from information on home ownership to watches, toys or other small items at its 13,100 U.S. restaurants, the Wall Street Journal reported.
Riker said the company already is experimenting in some locations with computer terminals that provide home buying information from Freddie Mac. He said customers are showing an interest in the terminals.
McDonald's first mentioned non-food retailing at its annual shareholders meeting last week, saying it was exploring options to grow the business amid a number of incidents that put the chain's sales and earnings under pressure last year.
The economic recession in the United States along with economic crises in Asia and Latin America hurt the company's profits. An outbreak of mad cow disease in Europe and a scandal involving the company's Monopoly game promotion also hurt sales and made investors nervous.
The company reported a 16 percent drop in first-quarter earnings April 19 but still met Wall Street estimates. Sales increased 5 percent in the quarter.
McDonald's (MCD: down $0.30 to $29.85, Research, Estimates) shares have traded between $25 and $31 over the past 52 weeks.
"I think we're growing, but we're not satisfied with our growth rate," Riker said. "We're opening up to 1,400 restaurants around the world this year, but we've had a difficult 2001. We've had some huge things come out of the blue."
Retail is just the latest concept the company is testing. McDonald's has been experimenting with a coffee-house concept overseas and has bought other well-known brands such as Boston Market, Chipotle, Pret a Manger and Donato's Pizza.
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