McDonald’s is getting eaten alive by revamped Burger King Whopper
While Burger King appears to be growing sales, the cash register may be a little weaker at McDonald’s (MCD).
“We believe the war and rising gas prices are partly responsible for this.” [for slowing McDonald’s sales]“This contributes to the decline in U.S. same-store sales growth from 3% in early March to the same level year over year in the last three weeks,” Evercore ISI restaurant analyst David Palmer wrote in a new note.
Palmer added: “We believe breakfast, perhaps a more discretionary part of the day where consumers are feeling pressure on discretionary income, has been particularly weak during McDonald’s slowdown in the US.”
A new fast food burger war broke out on social media in early March, and McDonald’s CEO Chris Kempczinski led the fight by going viral with a promotional video of the company trying out its new Big Arch burger. The clip was widely mocked for his seemingly hesitant approach to eating the burger, taking an unusually small, delicate bite, and his repeated references to the burger as a “product”.
Taking advantage of the backlash, Burger King US and Canada president Tom Curtis posted a TikTok video three days later. It featured him taking an enthusiastic bite of a Whopper and joking that the only thing missing was a “napkin.”
Curtis’ viral moment also shed light on the revamped Whopper, the company’s long-time answer to McD’s Big Mac.
Burger King has made a few subtle but meaningful changes to its Whopper for the first time in nearly a decade. The updated burger now features a higher-quality, more flavorful bun and a reformulated, creamier mayonnaise. Ingredients such as lettuce, tomatoes, onions, and pickles are prepared to taste fresher and stack more neatly.
Another important change is in its packaging: The burger is now served in a box instead of wrapped in paper to avoid crushing and preserve its presentation.
Shares of McDonald’s fell 6 percent last month, lagging the 6 percent gain of Burger King parent Restaurant Brands (QSR).
Burger King’s momentum against McDonald’s is about to be tested.
McDonald’s will soon unveil its much-hyped new value menu and new beverage lineup, including creamy vanilla cold brew coffee. The value menu, which will hit stores on April 21, will offer a variety of items under $3.
“U.S. franchisees unanimously approved the McValue menu (arriving April 21) and includes a $2.50 McDouble and $1.50 Sausage McMuffin for a limited time nationally,” Evercore ISI’s Palmer wrote. “Similar to Taco Bell’s successful Luxury Menu, this menu is designed to offer low entry-price items on an a la carte basis (not packaged). This could help solve McDonald’s traffic issues with low-income consumers.”
