Day 044 - 02 Nov 94 - Page 09

     
     1        are already quick service restaurants customers.  If other
     2        customers believe in the advertising and they think that it
     3        would be a good thing for them to patronise our
     4        restaurants, absolutely.
     5
     6   Q.   You are seeking to compete with all other people, people in
     7        organisations who sell food, are you not?
     8        A.  That is not what I said.  We do not compete with
     9        sit-down, what we call "white table cloth" restaurants;
    10        that is not our competition, and we are not seeking to
    11        compete with them.
    12
    13   Q.   Can you look at pink volume III, McDonald's Profile?
    14        A.  Thank you.
    15
    16   Q.   Turn to tab 4.
    17        A.  Yes.
    18
    19   Q.   Then turn to page 102?
    20        A.  Yes.
    21
    22   Q.   There is a paragraph there headed "Competition":
    23
    24        "McDonald's restaurants compete with international,
    25        national and regional retailers.  We compete on the basis
    26        of price and service - two key components of value - and by
    27        offering quality food products with speed and convenience.
    28        We view our competition in the broadest perspective -
    29        quick-service eating establishments, mom and pop's,
    30        take-outs, pizza parlors, coffee shops, street vendors,
    31        convenience food stores, delis, supermarket freezers and
    32        microwave ovens.  In fact, we view any business serving or
    33        selling food as a competitor."
    34
    35        So why were you denying that a minute ago?
    36        A.  I am not denying that.  I was saying that our
    37        advertising is directed specifically at people in quick
    38        service restaurants.
    39
    40   Q.   I asked you if McDonald's was seeking to compete with all
         other organisations that sold food.
    42        A.  It is in my opinion that they are seeking to compete
    43        with those people that are mentioned here.  But, for
    44        example, a white table cloth restaurant is not our
    45        competition, in my viewpoint.
    46
    47   Q.   So you disagree with what is written in the annual report?
    48        A.  In the broadest terms, I disagree with how we market to
    49        them, yes.
    50 
    51   Q.   What does "mom and pop's" mean in there? 
    52        A.  Mom and pop's would be a quick service restaurant, or a 
    53        small shop that is like a quick service restaurant, that
    54        only has maybe one or two retail outlets rather than a lot
    55        of retail outlets.
    56
    57   Q.   It is the name of a company, or something?
    58        A.  No, it is not.  It is just a reference to someone who
    59        may own only one or two restaurants, as opposed to a large
    60        chain of restaurants.