Burger King Worldwide Inc (BKW) Targets McDonald’s Corporation (MCD) Customers


burger king

Retail restaurant chains like Burger King Worldwide Inc (NYSE:BKW) and McDonald’s Corporation (NYSE:MCD) are serious about footfall and their sales impact; driving several initiatives aimed at improving the same amid the competitive environment.

New Nugget Deal, Targets McDonalds

In a latest move, Burger King announced that the company will start selling 10-piece nuggets for $1.49, to drive its sales as well as to win additional market share from competitors. Burger King also recently offered a $5 deal for two sandwiches.

Burger King has been successful in improving sales with their promotional strategy, which also helped a food chain to defend sales during an industry-wide slowdown. However, the restaurant operator increased the prices of some items to compensate for the discounts.

Darren Tristano, Executive VP at research firm Technomic, said that Burger King Worldwide Inc (NYSE:BKW) is competing aggressively with McDonald’s Corporation (NYSE:MCD). Burger King is doing it at a very low price to win customer footfall. Tristano added that Burger King is doing all that to steal market share from the other burger brands around them.

Dollar Menu Too Cheap

On the other hand, McDonald’s is facing pressure from franchisees to increase prices given the rising food prices. McDonald’s franchisees have been complaining about its “Dollar Menu,” which seriously impacts profitability. Hence McDonald’s is trying with a system similar to premium burger chains like Five Guys and Shake Shack rather than targeting value-conscious customers.

McDonald’s is testing a system to enable customers make their own burgers from a touchscreen, by allowing them to choose from a menu of different bun, cheese and toppings. The food chain has rolled out this new customizable burger system at four of its restaurants in San Diego with a hope of reviving its sluggish sales. McDonald’s is expected to roll out this system at 2,000 locations by the end of 2015. This system currently takes around seven-minute average wait time to get the burger ready, once the order is placed.

Lisa Ray

Lisa Ray primarily covers Retail and Healthcare. Lisa Ray has completed her MBA (Finance) and an avid market tracker. She is a stock market analyst who closely tracks US markets along with other global markets like India. She has been expressing her views for years about markets and also advises various clients.

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