We probably should have seen this coming. After all, for the last few months, Burger King Worldwide (NYSE: BKW) has taken its royal crown back amid strategic moves aimed directly at dethroning its larger rival McDonald's (NYSE: MCD) . The latest policy change from Burger King threatens a key McDonald's demographic as the Home of the Whopper ups the stakes.
McDonald's getting a bad run of cards
Domestic same-store sales growth for McDonald's has gone from bad to worse. This started right around the time Burger King began its one-on-one card game with the launch of Satisfries last September. The company boasts that the fries have "40% less fat [and] 30% fewer calories than the leading French fries." The leading French fries being the ones McDonald's serves, of course.
In that quarter of the launch, McDonald's domestic same-store sales were up a modest 0.7%, which isn't terrible considering the company's already massive size. From there, domestic same-store sales gained only 0.2% in October, and the tumble began in November with a 0.8% decline. In the fourth quarter, results dropped by 1.4%, which puts the December drop in the 1.5% to 2% range. In January, the downward momentum continued with a 3.3% plunge.
Whopper-size bets
While McDonald's was busy dilly-dallying with apple slices and Mighty Wings that seemingly nobody really wants, Burger King saw McDonald's unattended Big Mac and raised it a Big King. The Big King looks and sounds like a Big Mac, with two patties, three buns, and special sauce. The company even pushes the comparison in its marketing.
Next, Burger King saw the McRib sandwich and raised it a $1 BK BBQ rib sandwich of its own, only at a fraction of the cost. This was no coincidence.Whopper-size bets
While McDonald's was busy dilly-dallying with apple slices and Mighty Wings that seemingly nobody really wants, Burger King saw McDonald's unattended Big Mac and raised it a Big King. The Big King looks and sounds like a Big Mac, with two patties, three buns, and special sauce. The company even pushes the comparison in its marketing. . .
. . .Cont'd at: http://www.fool.com/investing/general/2014/03/16/burger-king-hits-mcdonalds-where-it-hurts.aspx
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