RAISING ISSUES OF SERVICE; MCDONALD'S DRAWS SHAREHOLDER FLAK.

Byline: Associated Press 

Carefully scripted testimonials and even Ronald McDonald himself tossing toys to the crowd could not hide the fact that McDonald's Corp.'s annual shareholders meeting was rife with discontent.

Shareholders peppered Chairman Michael Quinlan with questions about the chain's struggling U.S. performance, criticizing food and service quality and attempts to revive business with a long-term pricing promotion that has met with mixed results.

Quinlan said McDonald's has been accelerating its focus on quality, service, convenience and value and said food taste also is a key item on the agenda.

The meeting aimed to convey solidarity at the chain, with company directors, franchisees, suppliers and executives all rising at times to say why they liked working for the organization, while Ronald McDonald lobbed Teenie Beanie Babies into the crowd.

But McDonald's continued to be dogged by its domestic division's problems. Sales at stores open at least a year - a key industry standard - were stagnant or lower for five consecutive quarters before showing strong gains in the first three months of this year, in part on a successful Monopoly promotion.

Quinlan hinted the chain soon will unveil new sandwiches to address concerns about the taste, indicating that a new chicken dish is on its way. He declined later to elaborate.