Deals Galore For Customers As McDonald's Battles Its Competitors
October 15, 2014
(Off The Menu)
– When it comes to the fast food industry, no one—and I mean no one—compares to McDonald’s. Forget the food: I’m talking about the company as a whole. It’s the biggest and the best. There’s no comparison.
The Golden Arches made nearly $1.4 billion profit—that’s billion!—in its last quarter. Burger King? $75.1 million. Wendy’s? $29 million. McDonald’s has more than 35,000 locations worldwide. Wendy’s, Burger King and Taco Bell? Combined, they have about 26,000 locations.
If McDonald’s is the emperor of fast food, it would be Napoleon and Julius Caesar at the height of their power combined. And when powerful emperors are at their height, no one dares challenge them.
But these aren’t the best of times for McDonald’s. Oh it’ll stay No. 1 in fast food for the foreseeable future. No one else is going to make $1 billion profit anytime soon. But the company is struggling (struggling for them anyway). Its U.S. sales have stagnated. Global sales are down. It was recently connected in a huge food safety scare in Asia. And it’s struggling to bring in the millennial audience, considered to be the next major revenue stream for consumer goods in general.
And when there’s blood in the water, sharks will circle. McDonald’s competitors are going after them, and it’s all leading to better deals and offerings for consumers.
• Burger King began a limited-time promotion offering its version of 10-piece chicken nuggets for $1.49. McDonald’s is currently selling its 20-piece nuggets for $5 and it’s using the product to promote its annual Monopoly game promotion, a regular market driver. So essentially: During one of McDonald’s big promotional pushes for chicken nuggets, Burger King is offering the same number of nuggets for $2 less.
• Carl’s Jr. is currently selling all sizes of its soft drinks for $1, offering the deal not long after McDonald’s began offering all of its soft drinks for the same promotional price. The difference? Carl’s Jr.’s largest soft drink size is 44 ounces, while McDonald’s tops out at 32 ounces.
• Taco Bell is going after the morning fast food crowd with the launch of its breakfast menu across the U.S. Now lots of fast food chains offer breakfast, but which one did Taco Bell attack in its ad campaign? Here’s a hint: Its commercials featured a bunch of guys all named Ronald McDonald.
• And Burger King features its various Big King sandwiches—an attempt to counter McDonald’s Big Mac sandwich—in its 2-for-$5 mix-and-match promotion.
McDonald’s is in no danger of being overthrown at the top. It’s just too big. But as long as it’s struggling, its competitors will keep attacking. And that’s all to the benefit of customers.
Nevin Barich is the Food and Beverage Analyst for Industry Intelligence. Email him here or follow him on Twitter here.