3 Reasons Burger King Is Beating McDonald's
1. Promotions and discounting.
Cash-strapped Americans are increasingly unwilling to shell out for fast food.Burger King has lured in customers with promotions like the 2 for $5 sandwich deal, Businessweek writes. The brand also started selling 10 chicken nuggets for $1.49. To help offset the discounts, Burger King raised the prices of some items.
While McDonald's offered a promotion on free coffee, the higher price of burgers is a turn-off for consumers.
A Double Quarter Pounder with cheese, fries, and a drink now totals about $7.50 at some Chicago locations, Bloomberg reports.That's too expensive for many customers, Leslie Patton writes.
2. Simplified menu.
Burger King decided to focus on "fewer and more impactful products," Chief Executive Officer Daniel Schwartz told analysts.This strategy benefits Burger King because it simplifies operations in the kitchen, making service faster. It also means that franchisees aren't shelling out for a variety of products that potentially go to waste.
McDonald's, meanwhile is struggling with a menu that has become too complicated.CEO Don Thompson said the company is working on paring down the menu.
"We are streamlining our merchandising menu board and product offerings and in addition to making it easier for customer to order their favorite products, this will reduce complexity in our restaurants which in turn should enhance accuracy and speed of service," he told analysts earlier this year.
3. Fast renovations.Burger King is on-track to remodel 40% of its restaurants by the end of 2015, boosting sales by as much as 10%, executives say. McDonald's, which has a larger store footprint, "appears to be undergoing renovation at a slower rate," Wong writes.
By renovating stores with a modern feel, Burger King is able to better-compete with fast-casual competitors like Chipotle.
While McDonald's has fallen on hard times, the average store still makes twice as much as Burger King restaurants.
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