The company also plans to maintain its Dollar Menu and devote a substantial part of its 2003 advertising budget to supporting the menu, which has fueled a price war that has pressured the entire industry, the report said. The report cites a memo to franchisees from Mike Roberts, president of McDonald's USA.

Besides introducing a new mix of seasonings "to improve the flavor of our meat," the report said, the company also plans to roll out new sandwich buns in the spring.

A McDonald's spokesman would not confirm the contents of the memo.

"McDonald's has an aggressive action plan in place," the spokesman said on Tuesday. "Although we don't comment on internal documents, it's fair to say that McDonald's is playing to win in a competitive marketplace and taking necessary actions to move the business forward on behalf of our customers, shareholders and McDonald's employees. We're very optimistic about the future."

Last week McDonald's said it will post its first-ever quarterly loss after cutting jobs and closing outlets. The company said sales at restaurants open at least 13 months were down 1.6 percent so far in the fourth quarter before the effects of foreign exchange.

The idea that McDonald's plans to continue the Dollar Menu could prolong the price competition that has been hurting the entire fast-food industry, Mark Kalinowski, restaurant analyst at Salomon Smith Barney, said in a research note on Tuesday.

"We would view a major modification of the Dollar Menu, or its outright discontinuation, as a positive for McDonald's," Kalinowski said. "Investors who share our wish may be disappointed, though, if the Dow Jones News article is any indication."

McDonald's shares were down 4 cents at $15.51 in Tuesday afternoon trading on the New York Stock Exchange.  
 
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